Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENERGY

Electricity Privatisation

Mr. John Evans: To ask the Secretary of State for Energy if he will make a statement on the Government's assessment of the effect of privatisation on price rises in the electricity industry.

The Parliamentary Under-Secretary of State for Energy (Mr. Tony Baldry): I believe that the competition created by privatisation will bring benefits to all electricity consumers both in the price and in the quality of service.

Mr. Evans: Does the Minister agree that, now that inflation is climbing towards 10 per cent. and is likely to go even higher, although the price index that he has concocted will mean higher profits for the few, it will mean increased prices for domestic and industrial consumers, particularly in deprived areas such as Merseyside?

Mr. Baldry: The hon. Gentleman is mistaken. Customers consuming more than 1 MW are already benefiting from competition in the market and many have negotiated large price reductions. For those who need more time to negotiate longer-term arrangements, the industry has offered a real terms price freeze this year. For customers consuming less than 1 MW, the average increase this year will be about 9 per cent., but the price controls on the industry should prevent any further real increase until at least April 1993. That is good news for those consumers.

Mr. Hannam: Does my hon. Friend agree that, whereas privatisation usually brings down prices through competition, when new environmental protection mea-sures are to be introduced, they will incur extra costs, and the public must realise that they will add to prices?

Mr. Baldry: My hon. Friend, as ever, makes some very sound points. Of course, competition will be of benefit to the customer and the consumer. It will be for the generators to determine how best to meet the European Community large plant directive, but the capital costs of flue gas desulphurisation will be taken into account in setting the capital structures of National Power and PowerGen.

Mr. Dobson: Will the Minister confirm that, if a distribution company loses trade to other generators that supply power direct, its domestic consumers will find themselves making up the difference? Is not that why,

under the new scheme, the Merseyside and north Wales company will be entitled in future to impose price increases of 2·5 per cent. above inflation?

Mr. Baldry: Price increases vary among the different companies, as they have in the past, reflecting the fact that they have different costs and earn different rates of return. Of course, it will be for the director general to monitor and enforce the licence conditions. The Opposition would do better to refrain from any comment on electricity prices, because during the last five years of the Labour Government, in real terms industrial prices rose by 1 per cent. and domestic prices by a staggering 22 per cent.

British Coal

Mr. Skinner: To ask the Secretary of State far Energy when he next expects to meet the chairman of British Coal to discuss the coal industry; and if he will make a statement.

Mr. Cummings: To ask the Secretary of State for Energy when he next expects to meet the chairman of British Coal to discuss the coal industry.

Mr. Baldry: With permission, Mr. Speaker, I will answer these two questions together.

Mr. Skinner: When the Minister meets the chairman of British Coal, will he discuss stocks at power stations? Is he aware that, under the privatisation legislation and the office of fuel security code, the equivalent of three months' worth of coal stocks would have to be kept by a small power station whereas the same does not apply to oil and gas? Surely that cannot be right according to the hon. Gentleman's ideas of fair competition. It means that the market is rigged against coal. When the hon. Gentleman meets the chairman of British Coal, will he make it clear that coal will not be treated adversely compared with oil and gas and other forms of fuel. Otherwise coal will carry a handicap that it does not deserve.

Mr. Baldry: I should have made it clear that my right hon. Friend the Secretary of State and I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.
British Coal has negotiated with the generators three-year coal contracts that will give the coal industry a stable future. British Coal is much more optimistic about its prospects than is the hon. Gentleman. The chairman recently commented that the contracts provide the coal industry with a known sales prospectus against which to plan and operate.

Mr. Skinner: The man's thick.

Mr. Speaker: Order. Mr. Cummings.

Mr. Cummings: When the Minister next meets the chairman of British Coal, will he tell him of the worries and frustrations of the miners and community of the Easington district, which he visited 10 days ago, about the 40,000 tonnes of imported low-sulphur coal that arrived in Hartlepool a week before his visit?
Will he tell the chairman of British Coal of the worries of Easington district council about the proposed use of the Murton colliery spoil heaps, which are of strategic importance to the district's plans for the regeneration of industry and the provision of industrial estates?
Will he inform the miners of Easington colliery of their worth in terms of productivity and efficiency, even in the most exhausting circumstances that have arisen from recent flooding? Will he—

Mr. Speaker: Order. The hon. Gentleman may ask only one question; otherwise he is not being fair to his colleagues.

Mr. Cummings: Will the Minister give those miners some support and reassure them about the future of Easington colliery?

Mr. Baldry: I welcomed my recent opportunity to visit East Durham coalfield and Easington colliery in particular. It seemed to me that, if Easington colliery continued to be productive, it had a sound future.
The hon. Gentleman asked about coal imports. It is important to put those matters in perspective at all times. In 1988, the major importers of coal were the iron and steel industry and in that year total coal consumption in the power stations was 88 million tonnes, of which only 2·4 per cent. was imported. One has to put the matter in its context.
During my visit to East Durham coalfield, the hon. Gentleman and others showed me areas about which they were concerned—one of which was the surplus land at Murton colliery. As the hon. Gentleman knows, I have pursued the matter with British Coal and, as he also knows, British Coal has sought tenders for the sale of surplus land at that colliery. Once the site is restored, it should be eminently suitable for industrial and commercial development and I know that that will be warmly welcomed by Easington district council.
The hon. Gentleman will be glad to know that the Department of Trade and Industry, with the support of Durham county council and Easington district council, is committed to establishing a task force to co-ordinate activities aimed at the continued economic regeneration of the East Durham coalfield area.

Mr. Speaker: I hope that that response has demonstrated to the House what happens if— [Interruption.] It was not the Minister's fault. He was asked a number of questions. It would help if hon. Members asked single questions.

Dr. Michael Clark: When my hon. Friend next meets the chairman of British Coal, will he review with him the achievements of British Coal Enterprise, which, in the past five years, has created 1,640 jobs on sites no longer used by British Coal? In particular, will he congratulate the chairman of British Coal Enterprise on the success of Carcroft enterprise park where 60 companies now employ 500 people—more than were employed when British Coal was pursuing activities there five years ago?

Mr. Baldry: My hon. Friend is absolutely right. Only the week before last I had the opportunity to see for myself the work of British Coal Enterprise and its projects in Blyth valley and Newcastle. Through a whole host of schemes, British Coal Enterprise has helped to create several new jobs in areas that previously had coal mining industries. It is important to bear in mind the fact that coal mining is an extractive industry. Ever since the last war capacity in coal mining areas has been closing and the largest closures took place under the Labour Government

of 1964 to 1970. So what British Coal Enterprise is doing is extremely constructive, in trying to ensure that new jobs replace those that may be lost in the coal industry.

Mr. Brandon-Bravo: Although British Coal has undoubtedly made enormous strides over the past few years and deserves to look forward to a stable future, I am concerned about that future for the east midlands. I am concerned that some of our major power stations may use gas or imported coal to meet existing and future environmental standards. Will my hon. Friend the Minister give us some assurances about that?

Mr. Baldry: There is a question later on the Order Paper about flue gas desulphurisation. However, it might be helpful if I try to deal with my hon. Friend's question on that subject now. It must be borne in mind that under the European Community large plant directive there are three target dates: 1993, 1998 and 2003. We know how much coal British Coal will send to the generators in 1993 because that is part of the coal contracts that have already been entered into and that is a firm contractual commitment. Under that contractual commitment, British Coal has nothing to fear from gas or imported coal because we know the amount that will be used in 1993.
The retrofitting to which the generators are already committed—the 8 GW—will enable them to meet the target under the European Community large plant directive for 1998. It is perfectly possible for generators to burn as much coal in 1998 as in 1993, if they so choose. We must put those concerns into perspective. However, the amount of coal that the generators burn will always depend on the competitiveness of coal in relation to other fuels.

Mr. Benn: How can the Minister justify importing low-sulphur coal, which has a total foreign currency content, at a time when the Government are cutting investment in the scrubbing plant that would reduce pollution from coal produced in this country? Is the Minister aware that if Common Market regulations on sulphur emissions are applied by the end of the century, the coal import bill could be getting on for £2 billion a year against a background of an appalling balance of payments deficit? That would also freeze underground Britain's greatest natural resource.

Mr. Baldry: It is not the Government's policy to prevent coal users from purchasing coal from the source of their choice. However, as I have already explained, only 2·4 per cent. of coal used by power stations is imported. Restricting competition from other coal will not bring long-term security to the British coal industry. The best protection is to produce reliable supplies that are competitive in the world market.

Power Generation

Mr. Moss: To ask the Secretary of State for Energy what is his estimate of how much power was generated from waste incineration and landfill gas schemes in 1989.

The Minister of State, Department of Energy (Mr. Peter Morrison): Power generation capacity from waste incineration and landfill gas schemes during 1989 has been estimated at about 36 MW. Of that total, nearly 20 MW was from waste incineration and 16 MW from landfill gas schemes.

Mr. Moss: In view of the contribution that methane gas makes to the greenhouse effect, is not it vital that that gas is harnessed whenever possible for the generation of power? In that regard, is not the Government's policy on ring-fencing renewables within the non-fossil fuel obligation welcomed by environmentalists and electricity consumers alike and likely to lead to an even greater use of landfill gas schemes in future?

Mr. Morrison: The non-fossil fuel obligation, and its renewable aspect is very important. Our estimate for landfill gas schemes is that the capacity will increase to 60 MW by 1992 and to between 150 MW and 175 MW by the end of the century.

Mr. Haynes: I want the Minister to listen carefully. I agree with incinerating waste for energy purposes, but the Minister must seriously consider cancelling the landfill business because it creates a time bomb for many areas. The Minister knows what I am talking about. I hope that the Department of Energy will take my points on board, with a view to stopping that process.

Mr. Morrison: I assure the hon. Gentleman that I listened carefully—I could hardly do otherwise. However, he and I must agree to disagree on this matter because the production of landfill gas is a useful way of generating electricity.

Renewable Energy Sources

Mr. Mans: To ask the Secretary of State for Energy how much his Department is investing in the development of renewable sources of energy.

Mr. Peter Morrison: Energy paper 55 sets out a 10-year programme of research and development worth £360 million with costs shared between Government and industry. This year, my Department expects to spend just over £20 million on renewable energy research.

Mr. Mans: I thank my right hon. Friend for his reply. None the less, does he agree that in the medium term, renewable sources of energy will still constitute only a small percentage of our total energy needs and that the further development of other energy sources, such as nuclear power, which is so important to the north-west, should go ahead?

Mr. Morrison: I agree with my hon. Friend about the importance of nuclear power. As I, too, come from the north-west, I know how dependent we are up there on the nuclear industry. However, the necessary development and research into renewables is the right course to take.

Dr. Kim Howells: As the Minister will be aware, on 28 March the EC agreed to a package of aid for this country to the tune of about £2·5 billion to cover our present and future liabilities for the nuclear industry. What sort of package did the Government aim for with regard to renewable sources of energy? Is it of the same order, and if so, what sort of projects will it cover?

Mr. Morrison: The hon. Gentleman cannot have been listening to my reply to the original question when I talked about £360 million of further research and development, shared between Government and industry. The obvious renewable energy sources will be considered, such as wind, wave and landfill gas production.

Coal Privatisation

Mr. David Evans: To ask the Secretary of State for Energy what progress is being made in preparing the coal industry for privatisation; and if he will make a statement.

Mr. Baldry: The coal market is being progressively opened up to greater competition. Privatisation of the coal industry is a matter for the next Parliament.

Mr. Evans: I am grateful to my hon. Friend for his reply. Does he agree that with the closure of 90 pits, and a work force that is halving but with output remaining the same—mainly because of the 75 per cent. increase in productivity—the coal industry is moving inevitably towards privatisation? Does he further agree that the people of Great Britain will ask the Labour party time and again why it did not condemn the miners' strike in 1984–85? Is not it now apparent that the union leaders took Libyan blood money when they should have been looking after the interests of their members?

Mr. Baldry: It remains the Government's firm intention to introduce legislation in the next Parliament to return British Coal's mining activities to the private sector. The way in which British Coal returns to the private sector will, to a certain extent, depend on the increases in productivity that the coal mining industry makes in the meantime. The activities of the National Union of Mineworkers during the strike are a matter for which the leadership will have to answer to its members. The future of the coal industry depends on it increasing its productivity. I believe that the industry has the investment and the technology and, more importantly, that it has the men with the skills, to make that possible.

Mr. Eadie: Is the Minister aware that some of my hon. Friends will think that he was less than candid when he told us that there were no plans for privatising the coal industry? Does he accept that some of us think that plans for privatising the coal industry have already been made? Is he aware that there is great concern about the code of practice and the regulations governing safety in the mining industry and that there is little consultation between all the unions involved? The Minister should know that the Department of Energy has a joint consultative role when deciding on safety measures in the coal industry.

Mr. Baldry: Obviously, I did not make myself clear enough, so for the avoidance of any doubt let me make it quite clear that when the Conservative party wins the next general election, it will privatise the coal industry. Let there be no doubt about that. But let there also be no doubt that Conservative Members are as committed to safety in the coal industry as is the hon. Gentleman, and safety in the coal industry is a matter for the Health and Safety Executive.

Mr. Nicholas Bennett: Has my hon. Friend noticed that some of the best privatised industries have been formed as a result of workers' buy-outs? Therefore, will he assure the House that when British Coal is privatised after the next election, he will welcome offers from the National Union of Mineworkers to run the industry, as it seems to think that it knows better than British Coal?

Mr. Baldry: As I have made clear, once we have won the next general election, we shall consider how to take


forward our proposals to privatise the industry. Clearly, employee participation is one factor that it will be important to consider.

Mr. Doran: Where are the Government's policies?

Mr. Baldry: The hon. Gentleman asks where our policies are. Our policy is clearly that we intend to privatise the coal industry. That is clearer than the Labour party's policies on energy generally. If The Sunday Correspondent is to be believed, even such detailed policies as the Labour party has had on energy are now being abandoned as too turgid.

Mr. Morgan: The Minister seems to be giving a display of the old English proverb: When Blackadder is away, Baldrick will play. Will he give serious thought to the fact that coal privatisation has just been put back five years, in part because of the abandonment of the qualifying industrial users schemes, by which large, intensive electricity users were able to buy some of their marginal coal at cheaper world prices? One of the beneficiaries of that practice was Brymbo steelworks, the closure of which was announced this morning, with the loss of about 1,000 jobs in the Wrexham area and of roughly the equivalent of the output of one medium-sized coal mine. That will impose a considerable additional burden on all domestic electricity users in the Merseyside and north Wales area, who will have to pick up the tab for the 200 MW worth of lost electricity sales in that district. Will the Minister confirm that one of the effects of the abandonment of the qualifying industrial users schemes for large coal users has been that users such as the sadly departed Brymbo steelworks expect a rise of 60 per cent. in three years in the price that they will pay for their industrial electricity?

Mr. Baldry: The proposals to privatise the coal industry have not been set back by one day. The previous Secretary of State made a clear commitment to privatise the coal industry in the first half of the next Parliament. He made that commitment in November 1988——

Mr. Barron: That was the historic pledge.

Mr. Baldry: As the hon. Gentleman says, the historic pledge. That commitment to privatise the coal industry was restated by my right hon. Friend the Secretary of State in a reply on 30 April this year, and again when he was in Nottingham earlier this month. Let me make it clear, because it seems that Opposition Members have not understood it: when we win the next general election, the Conservative Government will privatise the coal industry. That will happen during the lifetime of the next Parliament, and not one day has been lost in that commitment.

Oil and Gas Production

Mr. Ian Bruce: To ask the Secretary of State for Energy if he will make a statement on the growth in oil and gas production in the south of England and in the English channel.

Mr. Peter Morrison: Production of oil and gas from onshore fields, most of which comes from southern England, has increased by about 85 per cent. since 1985. The current level is expected to increase fourfold when full

production from the second stage onshore development at Wytch farm starts later this year. There are no fields currently in production in the English channel.

Mr. Bruce: Will my right hon. Friend assure visitors to Purbeck in my constituency of Dorset, South that when they come to that area, the site of the largest oil and gas field in the European Community, they will have the greatest ease in finding red squirrels, abundant wildlife and beautiful views, and find it almost impossible to see any sign of British Petroleum's oil extraction? Will he further reassure my constituents and visitors that, with the oilfield's expansion, his Department, in partnership with BP, will ensure that that excellent record continues?

Mr. Morrison: I have been one of those visitors. I visited Wytch farm about two years ago and I was extremely impressed by the tremendous care that it takes of the environment. It goes into consultation in minute detail, and I have no doubt that for future stages it will consider everything that it hears and that the environment will in no sense suffer.

Mr. Simon Hughes: Is the Minister aware that there is just as much concern about transportation as about production of oil in the English channel? Will he have urgent talks with his colleagues in the Department of Transport to make sure that there is much better control of ships sailing under flags of convenience? Such a ship appears to have been involved in the spillage of 1,000 tonnes of crude oil in the channel over the weekend. Is he satisfied that the marine pollution control unit is doing its job properly and as quickly as possible? Above all, is he satisfied that the oil producer, or at least the transporter, will pay for the clean-up, not the poll tax payers in the coastal resorts of southern England?

Mr. Morrison: I shall pass on the hon. Gentleman's remarks to my right hon. Friend the Secretary of State for Transport. I have had discussions with my right hon. Friend's predecessor about the marine pollution control unit which led me to believe that the unit and all those involved in it are very professional.

Flue Gas Desulphurisation

Mr. Harry Barnes: To ask the Secretary of State for Energy when he expects the completion of the flue gas desulphurisation programme; and if he will make a statement.

Mr. Baldry: Together with other measures, the 8 GW of flue gas desulphurisation retrofits that my right hon. Friend announced last month will enable National Power and PowerGen to achieve the reductions in sulphur dioxide emissions that are required by the European Community large combustion plant directive by 1998.

Mr. Barnes: As late as last November the Prime Minister said that we were keen to get rid of our "dirty man of Europe" tag and were therefore committed to a 12,000 MW flue gas desulphurisation programme. That has now been reduced to 8,000 MW. Why is that? Is it because there is a commitment to import low-sulphur coal through ports such as those on the Humber? Why are private electricity companies given standards lower than those previously agreed with the nationalised industries?

Mr. Baldry: The hon. Gentleman is genuinely confused. I make it clear that the Government are determined to meet in full the European Community large plant combustion directive. The 8 GW retrofitting that has already been announced enables this country to meet in full the 1998 target. In terms of the 2003 target, the generators have not ruled out the prospect of further FGD retrofitting, but no decision needs to be taken in the immediate future for a target date that is about 13 years hence, not least because we hope that there will be continuing improvements in clean coal technology.

Sir Trevor Skeet: What does my hon. Friend expect to be the cost of extending the principle of FGD to all coal-fired capacity in the United Kingdom? Does he agree that that would make coal a more economic method of producing power?

Mr. Baldry: It is straightforward. This country is determined to meet the European Community large plant combustion directive. The Environmental Protection Bill will contain powers to ensure that my right hon. Friend the Secretary of State for the Environment and Her Majesty's inspectorate of pollution can oversee the generators to make sure that they comply with the directive. It is for the generators to decide how to comply with it. The 8 GW of FGD already announced will enable National Power and PowerGen to achieve the necessary reductions in sulphur dioxide emissions that are required by the target date of 1998.

Mr. Barron: Will the Minister answer a simple question? Why have the Government brought down the target for retrofitting FGD in Britain, designed to meet the targets agreed with EC, from 12 GW to 8 GW? What are the implications of the importation of lower-sulphur coal for our balance of payments and jobs in the mining industry? Why have the Government stood by while 49 collieries have been closed that could have supplied lower-sulphur coal to the market?

Mr. Baldry: I again make it clear to the hon. Gentleman that the Government have not reduced the amount of retrofitting to take place in the industry. The position is straightforward. The Government and the country will meet the EC large plant combustion directive in full. How that directive is met will be the responsibility of the generators and they will have a legal and statutory obligation to do so. The 8 GW of retrofitting already announced by National Power and PowerGen will enable them to meet the 1988 target in full. With regard to the 2003 target, they have not ruled out the prospect of further retrofitting, but it is not necessary now to make decisions on a target date some 13 years hence.

Gas Supply

Mr. Robert G. Hughes: To ask the Secretary of State for Energy what assessment he has made of the prospects for increasing competition in the supply of gas.

Mr. Peter Morrison: I am pleased to see early signs that competition is beginning to emerge in the supply of natural gas and I am confident that this trend will continue.

Mr. Hughes: I am grateful to my right hon. Friend for that answer. Does he agree that the fact that the price of gas to industrial consumers has fallen" and that the price

to the domestic consumer has also fallen if one does not take into account the rate of inflation, is a direct result of competition? Does he agree that the more competition increases the more likely we are to have lower prices?

Mr. Morrison: I agree with my hon. Friend. Competition has played an important part, as have the policies that the Government have pursued. That contrasts with what happened under the previous Labour Government; during their five years in office, prices increased substantially.

Mr. Doran: One method that the Government are using to increase competition in the gas industry is the diversion of gas supplies to electricity generation. As there are genuine fears that that diversion will lead to increased costs for domestic consumers and an increase in the already large import bill of 15 million tonnes of gas in equivalent terms, is that method under review? Surely such a review is necessary given the two major difficulties that the Government face—inflation and our balance of trade problems.

Mr. Morrison: I do not agree with the premise on which the hon. Gentleman asked his question. Gas is being used because it is extremely competitive; it happens to be environmentally good, too.

Council of Energy Ministers

Mr. Dykes: To ask the Secretary of State for Energy if he expects to attend future meetings of the European Community Council of Energy Ministers for discussions on energy saving and anti-pollution measures.

Mr. Peter Morrison: My right hon. Friend expects to attend on 21 May the Energy Council which will consider the Commission's communication on energy and the environment, which covers energy saving.

Mr. Dykes: I thank my right hon. Friend for that answer. Although, in future, energy saving will be more voluntary while anti-pollution measures are more compulsory, does my right hon. Friend agree that a package of such measures should be associated with the creation of the single market as well as the more commercial things to be done by the Department of Trade and Industry? When does my right hon. Friend believe that we shall catch up not only with the Community average on energy saving and anti-pollution measures, but with the best examples in Germany and elsewhere?

Mr. Morrison: I agree with my hon. Friend that energy saving and anti-pollution measures are not just Community matters, but worldwide ones. Therefore, it is important that Community members agree among themselves the best and most effective way ahead. I hope that my hon. Friend agrees that the lead we take on the Intergovernmental Panel on Climate Change, which is a 11 to this end, is the proper way to go about things because of their global nature.

Blaenant Colliery

Mr. Coleman: To ask the Secretary of State for Energy what representations he has received on the impact of the proposed closure of Blaenant colliery on the coal industry.

Mr. Baldry: I have received no representations on this matter.

Mr. Coleman: Now that the closure is inevitable, which does not seem to worry the Prime Minister as she regards Welsh people as "a load of old tripe"—her words, not mine—will the hon. Gentleman say what future the coal industry has in south Wales? What is the future of the Aberthaw power station, since the industry and the power station are dependent upon coal from Blaenant for blending?

Mr. Baldry: It is for the coal industry to decide its manpower requirements in the light of the tonnage that it can properly produce and sell in competition with other fuels. Decisions on the future of individual pits are taken by British Coal only after exhaustive review with the work force and the unions. I understand that Blaenant coal has a low volatile content and needs blending with coal from other sources to bring it to the required specification. The power station at Aberthaw can be supplied with such coal from other mines in south Wales.

Oral Answers to Questions — ATTORNEY-GENERAL

Crown Courts

Mr. Alex Carlile: To ask the Attorney-General if he will make a statement on staffing levels in the Crown courts.

The Solicitor-General (Sir Nicholas Lyell): Staffing levels in the Crown court are kept under review in the light of workload trends.

Mr. Carlile: Does the Solicitor-General agree that the heavy turnover of staff in Crown court offices is unacceptable? Does not he recognise that that is partly due to the reduction in the more senior management posts which have made a career in the Crown court unattractive?

The Solicitor-General: I recognise the problem, particularly in London and parts of the south-east. I am not sure that I agree with the hon. and learned Gentleman about the cause, and it is worth remembering that the burden on the Crown court is down, with the number of cases committed for trial decreasing from 104,000 last year to 100,000 in the year just ended. Furthermore, the Crown prosecution service has taken on the job of drafting indictments. Obviously the career structure as a whole within the Government legal service is important.

Mr. Lawrence: Of course, this is not the easiest time for the Treasury, but will my right hon. and learned Friend make it absolutely clear to the Chancellor of the Exchequer that the excellent reforms, transferring work from the High Court to the county court, which the Government are proposing will have important ramifications for staffing and cannot take place if the resources are not available?

The Solicitor-General: My hon. and learned Friend makes a good point. He should bear it in mind that over the past five years expenditure on the court services has increased from £145 million in 1984–85 to £261 million in 1989–90, and that there is an extra £70 million in the current year for the Lord Chancellor's Department although not all of it is for the court service.

Mr. Madden: Will the Solicitor-General give an assurance that however much the Government want to save public expenditure on the courts they will in no way assist the National Front to become a limited liability company and possibly a charity, thereby enabling it to continue to publish material that incites racism behind a legal smokescreen which the Secretary of State for Trade and Industry seems to be anxious to assist?

The Solicitor-General: The National Front does not arise from this question. As for saving money on the courts, if an increase in expenditure of about 80 per cent. in five years, with further increases this year, is thought to be saving money, I should be interested to scrutinise the Opposition's proposed budget.

Legal Aid

Mr. Harry Greenway: To ask the Attorney-General how many individuals were given legal aid costing £1,000 or less in the past year; and if he will make a statement.

The Solicitor-General: The great majority of legal aid payments for criminal cases in the magistrates court in 1988–90 were less than £1,000. The average bill for civil legal aid in 1988–89 was £1,153, and my hon. Friend will find fuller details in the Legal Aid Board's annul report, a copy of which is in the Library.

Mr. Greenway: Does my right hon. and learned Friend agree that the Kray brothers should repay any legal aid that they may have received, plus interest, out of the £266,000 so disgracefully paid to them for the film rights of their evil crimes? Will he see whether more can be done for people in need of small sums in legal aid, as he has said is already happening?

The Solicitor-General: In so far as any criminal has resources from any source, including the sort of source mentioned, they would be taken into account in estimating legal aid entitlement. My hon. Friend was right to suggest that there has been an increase in the amount available for legal aid. During the past 11 years it has increased from £100 million to £607 million.

Mr. Fraser: Does the Solicitor-General acknowledge that one reason why legal aid payments have increased is that the number of criminals has increased under a Tory Government? Does he further acknowledge that there is a crisis in the legal aid service because settlement for legal aid practitioners has been below the combination of the earnings index and the retail prices index? Will he and the Lord Chancelor ensure that, in the next legal aid settlement, the rate of remuneration for those carrying out legal aid work will not be lower than the rate of inflation which is chosen for those purposes?

The Solicitor-General: On the first point, the amount being spent on legal aid has risen rapidly during our time in office. On the second point about individual annual legal aid settlements, I am not sure that I accept that the settlement for the current year was below what was reasonably to be expected.

Mr. Dickens: Does my right hon. and learned Friend agree that although we want everyone to obtain justice, because of the legal aid system many people are opting for legal remedy who might otherwise settle their differences amicably? Has not it suddenly become a bottomless pit of


taxpayers' money that is for ever expanding? Should not there be more careful scrutiny of applicants and the money that they repay afterwards?

The Solicitor-General: There should certainly be careful scrutiny. The growth in the small claims court has encouraged many more rapid and less expensive settlements. It has provided effective access to justice for cases involving below £500 and, from early next year, cases below £1,000. My hon. Friend touched on the point made by the hon. Member for Norwood (Mr. Fraser) about the increased amount of legal aid. It is not simply that additional money is being spent—it is the number of criminals who are being brought to trial under this Government as opposed to the level of crime.

Appeals

Mr. Simon Hughes: To ask the Attorney-General how many appeals against conviction and/or sentence were heard by the Court of Appeal during 1988–89, and so far during 1990, in which the appellant had been released from prison before the hearing of the appeal; and if he will make a statement.

The Solicitor-General: In 1989, of 2,951 appeals, 23 appellants were released from prison and a further 43 were released on parole before the hearing of their appeals. The figures for 1990 to date are that, of 1,006 cases, two appellants were released from prison and 12 were released on parole before the hearing of their appeals.

Mr. Hughes: Is the Solicitor-General aware that it is unacceptable that someone should have his appeal heard after he has finished serving his sentence? That does the law no credit. Is not the legal system brought into disrepute every time an appeal is so long delayed that it is of little value to the prisoner and reduces his sentence not a jot?

The Solicitor-General: I agree with the hon. Gentleman in principle, but it must be realised that, for example, an 18-month sentence can lead to someone being released on parole in only just over six months. Of the cases coming forward, one third are ready within six months and 80 per cent. are ready within 12 months. The aim is always to bring on first those that are most urgent.

Al Fayed Brothers

Mr. Dalyell: To ask the Attorney-General what contacts have taken place between Kleinwort Benson, bankers, and his Department in relation to the financing of the Al Fayed brothers over Harrods.

The Attorney-General (Sir Patrick Mayhew): None, Sir.

Mr. Dalyell: May we have the Attorney-General's assurance that if one is rich enough, powerful enough and can get away with it, in such circumstances lying is now all right?

The Attorney-General: No, Sir.

Mr. Dykes: Does my right hon. and learned Friend realise that this unsatisfactory matter will not go away without further statements from the Government? Will he at least say today whether he has had contacts aim discussions with Treasury Ministers about the position of Harrods Bank Ltd?

The Attorney-General: I refer my hon. Friend to the statement made by the director of the Serious Fraud Office and the Director of Public Prosecutions on 1 March. They said that they were satisfied that every line of inquiry by the police had been properly followed through and that at the end of it there was insufficient evidence of an admissible nature in criminal proceedings to warrant bringing a prosecution in respect of any matter raised in the Department of Trade and Industry inspectors' report. That is the area for which I carry ministerial responsibility. If my hon. Friend wishes to raise further matters with my right hon. Friend the Secretary of State for Trade and Industry, he may do so.

Director of Public Prosecutions

Mr. Skinner: To ask the Attorney-General when he last met the Director of Public Prosecutions; and what matters were discussed.

The Attorney-General: I last met the Director of Public Prosecutions on 5 April, when we discussed matters of departmental interest. My right hon. and learned Friend the Solicitor-General met the Director on 25 April, in my absence abroad on departmental business.

Mr. Skinner: Next time, why does not the Attorney-General have a word with the Director of Public Prosecutions about Harrods? Why do not they examine that matter in detail? Is not the truth of the matter that there are people connected with Harrods, such as the Sultan of Brunei, who are very close to No. 10 and to the present Government generally? That is why they are getting away with it. Is not it the case that the Sultan of Brunei—whose surrogates, the Al Fayed brothers, run Harrods—is the same man who handed over £5 billion when the pound was in trouble against the dollar in 1986, and when the Prime Minister asked him to bail out the Government? Is not that at the bottom of it all?

The Attorney-General: I shall next see the Director of Public Prosecutions at half past four, but I shall not be raising any of those matters. The House, and possibly even the hon. Gentleman, may recall that publication of the report of the DTI inspectors into the Harrods affair was delayed for about 18 months. I dare say that, at the time, the hon. Gentleman was one of those who said that it was a cover-up, but in fact it was so that there should be no possible prejudice of any future prosecution by reason of the report's premature publication. It is a measure of the seriousness with which the two DTI inspectors viewed the possible criminality and the possibility of bringing proceedings in a criminal court that the report's publication was delayed for as long as it was.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Mozambique

Mr. Eadie: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom's response to the emergency appeal of the United Nations and Mozambiquan Government.

The Minister for Overseas Development (Mrs. Lynda Chalker): As I told the House on 26 April, the


Government have just pledged a further £3·5 million in emergency relief and 10,000 tonnes of food aid in response to the 1990 Mozambique emergency appeal.

Mr. Eadie: Although I appreciate the right hon. Lady's reply, is she aware that 4 million people were displaced in Mozambique and that one in three children there aged under five die? The Minister will be aware that the Mozambique Government's $136 million appeal has been underfunded. In view of her reply, and as the matter is becoming more urgent, will she re-examine that very serious problem?

Mrs. Chalker: Since 1987, we have pledged more than £55 million in emergency assistance, comprising emer-gency relief and food aid, and some £10 million last year —which included aid to Mozambique refugees. Particular attention was paid to the children among them. I will consider the hon. Gentleman's comments. Certainly we keep in regular contact, to ensure that we can help by every means available—including Operation Hunger, a non-governmental organisation which is very active in the area, particularly in relation to children.

Mr. Burns: In view of the importance to Mozambique of prawn exports, what action are the Government taking to assist that important sector of the country's economy?

Mrs. Chalker: Forty per cent. of Mozambique's export earnings come from the prawn industry. We are providing over £3·5 million to rehabilitate the prawn fishing fleet, modernise its processing facilities and build a jetty. Mozambique's prawns are fished by European Community fishing vessels which land the prawns as EC products. Therefore the hon. Member for Cynon Valley (Mrs. Clwyd) need have no fear that the prawns from Mozambique do not meet EC standards. The onus is already on those who contribute to the Mozambique economy through their fishing licences to reach the necessary standards. They do so. We hope that the industry will continue to be viable and to thrive.

Mrs. Clwyd: As Mozambique has the second highest death rate in the world, will the Minister condemn a new health threat facing Mozambique and other Third world countries? The vigorous promotion of very cheap and strong cigarettes by British American Tobacco will put an even greater strain on countries that are still fighting diseases such as malaria and tetanus. Will the Minister admit that the absence of international rules enables British American Tobacco to tell blatant lies about the safety of smoking? Is she prepared to join me in calling on BAT's shareholders to object at the annual general meeting on 31 May to BAT's making money by wilfully damaging the lungs of people in the Third world?

Mrs. Chalker: I am not sure that the hon. Lady's question has anything to do with the emergency appeal of the United Nations and Mozambiquan Government, but never mind. The hon. Lady knows that I share her concern about smoking. I shall look into what she said. In a free world it will always be up to the individual, but I understand her concern.

Mr. Teddy Taylor: How can the Minister say that she will look into this matter when she is well aware that every year at European Community meetings she and her colleagues have approved the spending of £600 million solely to subsidise the growing and dumping of high-tar

tobacco in Third world countries? Would not it be a good idea if the Minister tried to do something about such a scandalous abuse of public money—the spending of £600 million of British and European taxpayers' money solely for the purpose of producing tobacco that no one in Europe wants, which we then dump at crazy, low prices in Mozambique and other Third world countries?

Mrs. Chalker: I note what my hon. Friend says, but he knows full well that this country does not support that sort of dumping. The matter is of considerable concern and is being dealt with.

Global Environmental Fund

Mr. Cummings: To ask the Secretary of State for Foreign and Commonwealth Affairs if he supports the French proposal to establish a global environmental fund at the World bank.

Mrs. Chalker: We warmly welcome the World bank's recent initiative in outlining a possible framework of international collaboration on global environmental issues. At the recent meeting of the development committee in Washington, we supported the proposal that the bank should carry out further work to elaborate its proposals, in consultation with interested parties.

Mr. Cummings: Does the Minister agree that the industrialised nations should not expect the developing nations to stall, postpone or cancel their development plans to protect the global environment unless they are compensated for doing so? Does she also agree that the British Government's stance at the Bergen conference in opposing a new mechanism, whereby the industrialised countries of the north would compensate Third world countries, is a disgrace and a shame?

Mrs. Chalker: A great deal more work is going on, initiated by us and other Ministers in the development committee, to explore the sort of help that developing countries will need when dealing with global environmen-tal problems. The hon. Gentleman referred to the Bergen conference. I do not believe that we shall oppose anything at that conference that would help the developing countries.

Dame Peggy Fenner: I know that my right hon. Friend will share my pleasure that Britain is supporting the tropical forest action plan, which is just one aspect of our care for the environment. But has she seen the Friends of the Earth comment that casts doubt on the efficacy of the plan? Will my right hon. Friend look into that matter and reassure me that we are putting our money in the right place?

Mrs. Chalker: I assure my hon. Friend that the tropical forest action plan is a mechanism—it is no more than that. Each country that applies for action under it must have a worked-out national plan. In November I called at the Food and Agriculture Organisation conference for a total review. That review has been set up because we are not satisfied with the mechanism; we are determined to ensure that every national forestry action plan is a worthy one, and we shall support it only if it is.

Vietnam

Mr. Orme: To ask the Secretary of State for Foreign and Commonwealth Affairs when Government Ministers last discussed Vietnam with the United States Government.

Mrs. Chalker: The Government keep in regular touch, both at ministerial and official level, with the United States Government on the problem of the Vietnamese boat people. I last discussed matters in Washington on 23 April.

Mr. Orme: Did the right hon. Lady raise with the United States Government their opposition to the International Monetary Fund assisting Vietnam? Does she agree that Vietnam's economy must be put right? If it is put right, that will resolve some of the boat people's problems, so it is urgent that action be taken now.

Mrs. Chalker: I agree with the right hon. Gentleman that it is urgent that the economy of Vietnam is put right. I have urged a positive response by the United States to the international financial institutions, and the general issue of arrears owed to the IMF, including those of Vietnam, is being considered by the fund and bank in Washington.

Mr. Butler: Did my right hon. Friend impress upon our American allies the necessity for them to open their doors to more Vietnamese boat people instead of berating us and the Hong Kong Government?

Mrs. Chalker: I discussed with the United States people whom I saw the need for repatriation and the need to carry through the comprehensive plan of action, because without it there is no prospect of solving the problem of the boat people in Hong Kong. I hope that the United States will see the wisdom of the total programme that was agreed under the comprehensive plan of action.

Renewable Energy Sources

Mr. Jack Thompson: To ask the Secretary of State for Foreign and Commonwealth Affairs what aid Her Majesty's Government are giving to assist developing countries in developing renewable energy sources.

Mrs. Chalker: In 1988 expenditure from the bilateral aid programme on the development of renewable energy sources was some £15 million. In addition renewable energy components such as solar and wind-powered pumps, solar-powered refrigerators, solar water distillation and solar water heating have been incorporated in projects which are not primarily energy focused.

Mr. Thompson: Will the Minister take into account the fact that in developing countries there is a temptation to use fossil fuels with all the associated environmental problems when crude methods of burning them are used? Can greater emphasis be put on the better use of fossil fuels and of renewable sources?

Mrs. Chalker: The hon. Gentleman is right: fossil fuels create problems not only of ash disposal but of what they emit into the atmosphere. That is why we are looking with each country at power efficiency, linked closely to the environmental concern to which the burning of fossil fuels can give rise. But we shall also continue our research with the intermediate technology development group to ensure that we have more effective equipment that can use the renewable sources of energy.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Mr. Tam Dalyell.

Mr. Tam Dalyell: On a point of order, Mr. Speaker. In conjunction with my right hon. Friend——

Mr. Speaker: Order. I called the hon. Gentleman to move his application under Standing Order No. 20, not to raise a point of order.

Atlas Steel Foundry

Mr. Tam Dalyell: Under Standing Order No. 20, and in conjunction with my right hon. Friend the Member for Salford, East (Mr. Orme) and my hon. Friend the Member for Manchester, Blackley (Mr. Eastham), chairman and secretary respectively of the Amalgamated Engineering Union group, I seek leave to raise an issue which I believe should have urgent consideration, namely,
the action of the Department of Trade and Industry on the Atlas steel foundry in my constituency and on its referral to the Monopolies and Mergers Commission, in the light of the verdict in the Court of Session in Edinburgh on Friday afternoon giving an interdict.
I should like to acknowledge the presence of the hon. Member for Mid-Worcestershire (Mr. Forth), the Under-Secretary of State for Trade and Industry.
That matter is important because it concerns the future of basic heavy manufacturing industry in Britain. It is definite because it was the subject of court proceedings on Friday. I can put the matter no better in terms of urgency than the letter from the solicitors concerned to Nigel Harris of the AEU. Mrs. Laura Walker says:
May I stress that, although the Interim Interdict stands until it is recalled, we anticipate that Cooks will now attempt to recall it. It is therefore imperative that the Union ascertains from the Secretary of State for Trade and Industry and from the Office of Fair Trading what they are going to do about the breach of the undertaking so that they can take appropriate action, as they are the bodies who, in the eyes of the Court, have both title and interest to sue.
The debate is urgent because of the need to ascertain what the Department of Trade and Industry will do in

relation to section 74(1) of the Fair Trading Act 1973, under which a Secretary of State may, by order made by statutory instrument,

"(a) prohibit or restrict the doing of things which in his opinion would constitute action to which this subsection applies, or
(b) impose on any person concerned obligations as to the carrying on of any activities or the safeguarding of any assets".

It is the Armadale assets that are vital to continue the heavy industry, which this country would not have if Armadale ceased to exist.
The Act continues:

"(c) provide for the carrying on of any activities or the safeguarding of any assets either by the appointment of a person to conduct or supervise the conduct of any activities (on such terms and with such powers as may be specified or described in the order) or in any other manner, or
(d) exercise any of the powers which, by virtue of paragraph 12 of Schedule 8"——

Mr. Speaker: Order. The hon. Gentleman has had his time.
The hon. Member for Linlithgow (Mr. Dalyell) asks leave to move the Adjournment of the House under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely:
The Department of Trade and Industry action in the light of Lord Milligan's granting interdict in the Atlas case.
As the House knows, I have to announce my decision without giving reasons to the House. As the hon. Gentleman equally knows, I have listened with care to what he has said, but I must determine whether his application comes within the scope of the Standing Order. I regret that in this case the matter does not meet those requirements, and I therefore cannot submit his application to the House.

Points of Order

Mr. Alfred Morris: On a point of order, Mr. Speaker. I would be grateful to know if you have had any indication from the Home Secretary or the Secretary of State for Health that there will be a statement later today, or tomorrow, about the many recently reported cases of people posing as health visitors or social workers on visits to the homes of families with young children in Manchester and many other parts of the country. There is now deep and widespread public concern about these visits and a statement is urgently necessary. It would be especially helpful to the House to have a statement from the Home Secretary about the outcome of today's meeting in Sheffield on the co-ordination of police activity in this important matter.

Mr. Speaker: I have had no request for a statement, but if a meeting is taking place today, there may be a statement tomorrow. I am sure that what the right hon. Gentleman has said will have been heard by the Leader of the House and by the Patronage Secretary.

Mr. Ray Powell: On a point of order, Mr. Speaker. I trust that your attention has been drawn to an article in today's "Londoner's Diary" of the Evening Standard, which suggests that you, Mr. Speaker, would open the pigeon loft to hon. Members. I discussed the matter with a reporter from "Londoner's Diary", as the elected Chairman of the New Building Sub-Committee. When we discussed the allocation of rooms that could become available above Speaker's House, I gave him no indication that I or any members of the Sub-Committee had barged into Speaker's House. It was on your invitation, Mr. Speaker.
Knowing full well that there were available rooms there, you asked the Sub-Committee to investigate to see if those rooms would be acceptable to hon. Members. The reporter might have suggested that he had written a light-hearted article, but earlier this afternoon I reminded him on the telephone that it is not a light-hearted matter for Members of Parliament who have been waiting five or six years for suitable accommodation in which to undertake their work.
To ensure that the record is set straight, I should like to make it clear that the members of the Committee came to Speaker's House at your invitation, Mr. Speaker, and examined the rooms. I hope that. in the not-too-distant future, these rooms will be made available for allocation to Members. I thought that I should make the position clear to ensure that you, Sir, are not implicated.

Mr. Speaker: The hon. Member for Ogmore (Mr. Powell) mentioned an article in today's Evening Standard. I have not seen today's article, but I saw last Friday's. I am grateful to the hon. Member for having put the record straight.

Mr. Dennis Skinner: Mind the stool pigeons!

Mr. Speaker: Order. This is an important matter for Members. It was mentioned to me by several Members and by several people this weekend.
It might be for the benefit of all concerned if I were to add that it has always been the intention to implement plans to make these rooms available for the benefit of

Members, subject to the necessary financial provisions being made available and to provision of a means of access, without which the rooms could not be used at all.
As the completion of phase 1 is now in prospect, I thought that it would facilitate planning for members of the New Building Sub-Committee to see for themselves what these rooms were like. Accordingly, as the hon. Member said, it was at my invitation that the members of the Sub-Committee came to Speaker's House last week. I thank the hon. Member for putting that matter right.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. I do not know whether you have seen the excellent 250-page report on low flying which was produced this morning by the Select Committee on Defence. There is a hole in the report, which raises an important procedural question and which shows the perverse effects of our rules. The report criticises the Royal Air Force's resistance to the use of simulators, yet the public expected the report to deal at some length with simulators for the training of pilots.
The Committee asked a firm called Link-Miles to write a letter setting out its position but, contrary to what the public would want, the Committee failed to take evidence from that firm. I put it to you, Sir, that it did not take evidence from Link-Miles because the Chairman of the Select Committee on Defence is a consultant to that company——

Mr. Speaker: Order.

Mr. Campbell-Savours: The Committee was plainly compromised—[Interruption.] It is quite unacceptable.

Mr. Speaker: Order. The hon. Member is making very serious allegations about an hon. Member of this House. If he wishes to make those allegations, he knows that he must not do so under the guise of a point of order, but should do so by a motion on the Order Paper. This is not a matter for me.

Mr. Campbell-Savours: It is not a matter of allegation, Sir. The hon. Member for Hampshire, East (Mr. Mates) has declared his interests in the Register of Members' Interests and——

Mr. Speaker: Order.

Mr. Campbell-Savours: —and—[Interruption.]—com-promises the work of the Committee.

Mr. Speaker: Order. I am not prepared to have allegations of this kind made about an hon. Member under the guise of a point of order.

Mr. Campbell-Savours: Well, why——

Mr. Speaker: Order. The hon. Member must take up the matter in the proper way and make his allegations to the Select Committee concerned. I will not have such allegations made in the Chamber. That is reprehensible.

Mr. Tony Banks: Returning to the previous point of order about those spare rooms you seem to have, Mr. Speaker. I find myself in rather straitened circumstances, as I have to share a room. As you obviously carry some clout in this place, Sir, I wonder whether, if I volunteered to powder your wig and polish your buckles, I might stand a chance of having one of those rooms.

Mr. Speaker: It may take a little while for the rooms to become available, but if the hon. Gentleman sets about procuring some powder and some polish, they may stand him in good stead with my successor.

Mr. Richard Holt: On a point of order, Mr. Speaker. I am sure that you are aware that, with the new polished-up image of the Labour party, no Labour Member is allowed to appear on television unless he is wearing a collar and tie, and also that no Member of the Italian Parliament is allowed to enter the parliamentary building unless he is wearing a collar and tie. Given that we are trying to set examples to deter would-be football hooligans, is it not time that you exercised your authority to ensure that no Member of Parliament disports himself here in a manner that would prevent him from being admitted to the Italian parliamentary building?

Mr. Speaker: I am responsible for a great many things, but the way in which hon. Members dress is not one of them.

Mr. Holt: It is in "Erskine May".

Mr. Speaker: It may be in "Erskine May". The hon. Gentleman must not press me to give reasons why I call or do not call hon. Members, although I must say that those who appear in what I would call casual dress do not stand quite as good a chance as some other hon. Members.

Mr. Jeremy Corbyn: Further to the point of order, Mr. Speaker. May I seek your guidance on this matter? I am sure that you will agree that being a Member of Parliament is an important job but that what is most important is that a Member of Parliament should represent the interests of the constituents who elect him or her, rather than those of commercial pressure groups or similar organisations. Will you confirm that it is most important that Members of Parliament should do that? Will you also confirm that at least three hon. Members in the Chamber are not wearing ties—including yourself'? I should not dream of saying that you or any of my female comrades were improperly dressed.

Mr. Speaker: Perhaps I should declare an interest. I suppose that I could be said to have a commercial interest in the way in which hon. Members dress, so I am not prepared to give a judgment on the matter.

Mr. Campbell-Savours: On a point of order, Mr. Speaker.

Mr. Speaker: No, I am not taking a point of order——

Mr. Campbell-Savours: On a point of order, Mr. Speaker.

Mr. Speaker: I say to the hon. Gentleman that I do not propose to take a point of order——

Mr. Campbell-Savours: On a point of order——

Mr. Speaker: Order. The hon. Member must sit down when I am on my feet. I am not prepared to take a point of order on the matter that he has just raised. He must deal with it through the proper channels.

Mr. Campbell-Savours: Mr. Speaker——

Mr. Speaker: Order. The hon. Gentleman must deal with the matter in the proper way, through the Select Committee on Members' Interests. It is not a matter that he can raise in the Chamber. I am saying that to him straight, and I do not expect him to raise the matter again if I call him.

Mr. Campbell-Savours: This is the question that I want to raise with you, Mr. Speaker. What is the Speaker of the House of Commons responsible for? If he is responsible for preserving the integrity of Parliament, he should surely wish to concern himself with the matter that I have raised, which goes to the heart of what Parliament is all about. If a Select Committee report has a hole in it because of the commercial interests of the Chairman of that Committee, Mr. Speaker surely has a responsibility in relation to the matter. It cannot be left to other Committees, which are often a little reticent about making decisions.

Mr. Speaker: The hon. Gentleman sought to speculate on the motives of a Committee in failing to take evidence from a certain company. That is certainly not a point of order, and it is not a matter for me. The companies from which the Select Committee takes evidence are a matter for that Committee and not for me.

EUROPEAN COMMUNITY DOCUMENTS

Ordered,
That European Community Document No. 4704/90 relating to motor vehicle emissions be referred to a Standing Committee on European Community Documents.—[Mr. Lightbown.]

Taxation (Opposition Policies)

Mr. Bowen Wells: I beg to move,
That this House notes the Labour Party's continued commitment to massive increases in public expenditure funded by the imposition of new taxes on savings, jobs and property and increases in rates of income tax and national insurance; contrasts the Labour Party's refusal to reveal its plans for the basic rate of income tax with the Government's goal for the basic rate of just 20p; believes that Labour will be forced substantially to increase the burden of tax on many lower and middle income earners to realise their public expenditure plans; notes that Labour plans run counter to the growing international consensus on the case for low taxes; and believes that the imposition of higher taxes and new taxes would stifle enterprise, drive firms and individuals abroad and gravely weaken the wealth-creating capacity of the United Kingdom economy and create unemployment.
I hunted around for a text from which I might take the keynote of my speech today, and I thought that it would be appropriate to quote a little bit of Lewis Carroll. The quotation begins "The time has come", and indeed the time has come. The quotation also reflects the way in which the Labour party is trying to delude the public about the way in which it might take decisions if it was in office.
My quotation begins:

"'The time has come …
'To talk of many thing:
Of shoes—and ships—and sealing wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings.'"

Hon. Members may recall that that little piece ended after the conversation between the Walrus and the Carpenter and there was no reply from the oysters which had been carrying on a conversation on the beach. There was no reply, because the oysters had all been eaten.
I suggest that the result of the Labour party's tax policy would be that incomes in this country were reduced to a very low level. Indeed, taxpayers would not be able to pay for the expensive policies instituted by the Labour party.
The time has come to speak of these things because many people, misguidedly, have elected to vote Labour in recent elections. The Labour party increased its number of seats in the local government elections and it is essential that we should warn the electorate and make them clear about the consequences for taxation policy of electing a Labour Government. When we talk about tax policies, we are talking about a reflection of the Labour party's priorities and philosophy in its approach to government.
Labour's dilemma is that it seeks to spend more and more money on social services, health services, and education and local government services. The Labour party promises the electorate that that spending can be achieved without an increase in taxation. Where taxation will be increased, the Labour party tries to suggest that that will be met by taxing the rich. However, we have yet to define "rich". I am sure that the right hon. and learned Member for Monklands, East (Mr. Smith) would not like me to remind the electorate that he thinks that anyone earning more than 17,000 a year is rich. The Labour party believes that by taxing the rich it can somehow pay for excessively expensive social and public services.
Income tax is now reaching down the income levels, and is continuing to do so, down to those who are on very humble incomes, which may be little more than the basic

state pension. Labour will tax the vast majority of people who earn humble incomes. It will take money from those people and redistribute it to those whom the Labour party in its arrogance believes should receive more. That is the problem that has faced Labour parties in this country, in eastern Europe, in the Soviet Union or in the Third world.

Mr. Dennis Skinner: rose——

Mr. Wells: The Labour party cannot carry out its very expensive programmes unless tax is raised. Only then can it carry out the demands of clause 4 of its constitution.

Mr. Skinner: Will the hon. Gentleman give way?

Mr. Wells: In a moment.
Before the hon. Member for Bolsover (Mr. Skinner) intervenes, I should like to remind him exactly what clause iv of the Labour party's constitution states, because it illustrates what the Labour party intends. The party has never been able to abolish clause Iv of its constitution, paragraph (iv) of which states:
To secure for the workers, by hand or by brain, the full fruits of their industry and the most equitable distribution thereof that may be upon the basis of the common ownership of the means of production, distribution and exchange and the best attainable system of popular administration and control of each industry or service.

Mr. Skinner: The hon. Gentleman has said that the Labour party would have some difficulty financing its programme. I read the other day in a Tory newspaper that the Government are also in a serious predicament because they have to find £15 billion in this current year—not after an election—to finance their programmes. The problem for the Treasury is where to find that money. Before the hon. Gentleman goes any further, I should like to know where he would get that £15 billion from to balance the books this year. He would give us a bit of direction if he could tell us whether he has any ideas about where to get that money from, so that he can tell his right hon. and hon. Friends on the Treasury Bench. Remember the figure—it is £15 billion.

Mr. Wells: It is our very good fortune that, after 11 years of Conservative government, the Government are running a surplus on their current account. Although we cannot predict what that surplus may be in the coming year, the Treasury will have little difficulty in financing that extra £15 billion. The question is whether it would be wise to do so and whether my right hon. and hon. Friends should insist on a reduction in public spending.

Mr. Skinner: What is the hon. Gentleman's answer?

Mr. Wells: My answer is that the money is already there. We do not have to raise it from anywhere.

Mr. Ian Taylor: Given that the Labour party's programme involves nationalisation on a mammoth scale, which my hon. Friend has just mentioned, does he agree that not only would the Labour party be incapable of running a public sector debt repayment, but that it would be massively in debt on the public sector, which would hamper the social programmes that it wanted to put into practice? Indeed, it was because the Labour party was in such massive state debt last time it was in power that it had to cut social services and investment in public facilities in real terms.

Mr. Wells: My hon. Friend is absolutely right. Indeed, he has anticipated me, because, while discussing this point, I had wanted to highlight exactly the mess into which the Labour party got this country in 1976 when some of its friends began to realise what it was doing.
I should like to quote from the beginning of the "Public Expenditure—General Review" of 1976, the author of which was the right hon. Member for Leeds, East (Mr. Healey). The Labour Government were in serious difficulties at the time. The second paragraph of the introduction states:
In the last three years, public expenditure has grown by nearly 20 per cent. in volume, while output has risen by less than 2 per cent. The ratio of public expenditure to gross domestic product has risen from 50 per cent. to 60 per cent. Fifteen years ago, it was 42 per cent. The tax burden has also greatly increased. In 1975–76, a married man on average earnings was paying about a quarter of his earnings in income tax".
We are talking about low-paid people—about people on average or lower than average earnings who were paying about a quarter of their earnings in income tax, compared with one tenth in 1960–61.
The paragraph continues:
On two thirds average earnings a man is paying more than one fifth, compared with less than one twentieth. Tax thresholds have fallen sharply in relation to average earnings. In other words, more poor people are paying tax and people are being drawn into tax on income levels which are below social security and benefit levels. The increase in the tax burden has fallen heavily on low wage earners, those earning less than the average contribute over a quarter of the income tax yield. This cannot be made good simply by increasing the burden at the top. If no taxpayer were left with more than £5,000 per annum after tax"—
swingeing taxes on the rich—
this would increase the yield by only about 6 per cent.
There it is—the right hon. Member for Leeds, East spelled out from experience exactly what happens under Labour Governments. They have to tax their own people, poor people, at the lower end of the income tax levels, in order to achieve the objectives of clause Iv—to redistribute the income to those they want, engineer our country's social life and achieve their egalitarian aims, which have not altered.

Mr. Ian Gow: Why has not my hon. Friend brought with him copies of the letters sent by the then Chancellor, to whom he referred, to Dr. Johannes Witteveen? Those letters were the consequence of policies consistently followed by the Labour party, which borrowed where it dared not tax and printed what it could not borrow.

Mr. Wells: If my right hon. Friend had had time to communicate with me during the weekend and had known the line of argument that I was going to take in this debate, I have no doubt that he would have sent me copies of those excellent letters that illustrate so well the point that I was making.

Mr. David Winnick: Instead of dwelling 14 years in the past—perhaps he may want to go back 24 years—would it not be more advisable for the hon. Gentleman to spend part of his speech on the crippling mortgage interest rates being paid by so many of his constituents and the poll tax being levied on many people who are paying double or treble what they were previously paying? Would it not be appropriate to find time to dwell on some of the remarks by the Chief Secretary to the Treasury during the weekend, when he drew a pessimistic

picture of the economy? Will not people come to the conclusion that the hon. Gentleman is devoting all his speech today to what happened 14 or 20 years ago because he is frightened of dealing with the problems caused by a Conservative Government?

Mr. Wells: The hon. Gentleman's intervention leads me nicely to my next point. It also allows me to say that, if the hon. Gentleman thinks that interest rates are too high under this Government, he should imagine what they would be under a Labour Government. They would be a great deal higher. A major problem, and one of the reasons for this debate, is to try to find out exactly what the Labour party's policies will be. The Labour party is inclined to be excessively coy with the public because it does not want the facts and its long-term aim to be known and understood, because once the electorate do so, they will not vote for the Labour party. The job of the House is to point out those facts.
The hon. Gentleman's intervention leads me to the fact that inflation is undoubtedly too high in this country; the Government, whom I support, have made a mistake. It is not, and has never been, the Government's objective to let inflation increase to this extent, but I am equally responsible, together with all Labour party members, for that dilemma. In 1987, when the stock exchange fell dramatically, many of us thought that we were in for a catastrophic slump. I was one of those who urged the then Chancellor to stoke up demand and——

Mr. Skinner: The hon. Gentleman caused it.

Mr. Wells: I was one of them. I never heard a dissenting voice from the Opposition, and the then Shadow Chancellor of the Exchequer urged the then Chancellor to increase demand and lower interest rates. That is what happened and I have told the House what we did. We did that because we are just as anxious as Labour about the unemployment rate and Britain's productive ability, and we certainly did not wish to see a slump. We were in good company, because most of the world's central bankers, who were at that time conversing with each other on the telephone, were following that counter-cyclical policy. There is no doubt that that fed into the economy more demand than there should have been, and we are now seeing the result.
Labour's policy is to increase demand to even higher levels than those that we have at present, so that, as it continually said for eight years while unemployment was high, unemployment can be reduced. Labour certainly adopted those tactics when in office. The country should not believe that Labour's policies will be anything other than grossly inflationary, with the result that the same conditions will prevail as prevailed in 1976, when the Labour Government had to introduce a public expenditure paper.
After we have looked at what Labour proposes to spend, we shall look at what it says about how it will raise taxes to meet that expenditure. So that I am not seen to be negative or carping or over-critical of the Labour party, I shall suggest some ways in which the Conservative party can put forward constructive suggestions. After that, I hope that people who were tempted to vote Labour will never do so again.
I am deeply indebted to the shadow Chancellor, the right hon. and learned Member for Monklands, East, for his recent interview in The Independent on Sunday, because


it is difficult to find out from what he says in the House exactly what he expects to spend money on. He ducks that question. The interview was helpful, because in it the shadow Chancellor explained that what he described as welfare expenditure should be funded from taxes. So far, Labour commitments in that area include £5 billion extra for the National Health Service; £5 billion more on child benefit and pensions; and £1·7 billion for overseas aid.
I would not decry an extra £1·7 billion for overseas aid, but we have to see how and when we could afford that money. We should look much more at the ways in which we can help people overseas to help themselves. We should not simply press large quantities of money on them which they are not able to use and which distract them from building up their own economy. More should be spent on overseas aid, but trade is more important than aid, and a prosperous Britain which can import goods from Third-world countries and export good-quality and low-priced goods to those countries is more beneficial than aid.
That is not the end of the Labour party's expenditure plans.

Mr. Tony Banks: The hon. Gentleman is quoting the shadow Chancellor, my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). Did he read the excellent recent speech by the shadow Chancellor in New York, when he said:
We are also determined to maintain a responsible fiscal policy with prudent control over public finances, spending only as resources allow and as the economy can afford.
Is that not the sort of well-received speech that goes down well throughout the country and internationally? Does the hon. Gentleman agree with what my right hon. and learned Friend said on that occasion?

Mr. Wells: I have no difficulty in endorsing that statement. If we could believe that that policy will be pursued by the Labour party in its general election campaign and, if successful, in office, I am certain that that kind of bromide would result in many people wanting to vote Labour. It is such bromide and argument that needs exposition today. A Conservative or Labour Chancellor could make a similar statement to that of the right hon. and learned Member for Monklands, East.

Mr. Norman Tebbit: My hon. Friend should be careful, as he may be getting himself into a trap. He will have noticed that the words of the shadow Chancellor were spoken to bankers in New York and they are different from those that he speaks to representatives of the Health Service unions and those seeking more expenditure in this country. My hon. Friend could fall into a trap, because one could use a very unparliamentary word about someone who says different things in different places to try to con the voters.

Mr. Wells: I am grateful to my right hon. Friend for pointing out the issue about which I want to talk.

Mr. Tom Clarke: On a point of order, Mr. Deputy Speaker. The right hon. Member for Chingford (Mr. Tebbit) has just accused my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), who happens to be my next-door neighbour, of saying different things to bankers in New York from what he has said to representatives of the Health Service unions. I have been to numerous meetings with my right hon. and

learned Friend and I know that he has said exactly the same thing as he said to those bankers. It is ignoble for the right hon. Member for Chingford to make such a statement, especially in the absence of my right hon. and learned Friend, and he should withdraw it.

Mr. Deputy Speaker (Sir Paul Dean): That is not a point of order for me. I know that the hon. Gentleman hopes to catch the eye of the Chair and, if he does so, he can return to the matter.

Mr. Wells: Perhaps I can answer for you, Mr. Deputy Speaker. The plain fact is that the Labour party is trying to obscure, and in that it is led by the right hon. and learned Member for Monklands, East.

Mr. Skinner: Led?

Mr. Wells: Yes, the right hon. and learned Gentleman is leading the Labour party in obscuring what will happen under a Labour Government, but that is exactly what we must try to examine sensibly, carefully and logically, without rancour and without unnecessary political bickering.
My right hon. Friend the Member for Chingford (Mr. Tebbit) is right to point out the difficulties we get into when we listen to the right hon. and learned Member for Monklands, East. He will not tell us the truth, because no one knows the pressure to which he will be subject should he become Chancellor. The pressure will be great, because the Labour party has not said no to anyone who wants to increase expenditure. In the past 11 years, I have never noticed the Labour party going against a strike—the ambulance workers' strike, the miners' strike or the steel workers' strike—for extra pay and remuneration.
I have never heard Labour Members applauding cuts in the Health Service, the education service or local government. They have always wanted more and more expenditure. The people believe that the Labour party stands for such expenditure and that it will spend money on them and all the desirable things upon which we also want to spend money, but we know that that money must be earned first. The Labour party has no idea how to earn it.

Mr. John Battle: The hon. Gentleman referred earlier to the Health Service and to the amount of expenditure needed for it. This morning's edition of The Daily Telegraph contains a report of all-out war between some Secretaries of State and the Treasury. It is reported that the Secretary of State for Health is demanding £3 billion so that he can introduce the new health reforms and cover wages within his Department. Whose side is the hon. Gentleman on in the war between the Secretary of State for Health and the Treasury?

Mr. Wells: I am in favour of additional expenditure on the Health Service, if it is wisely spent and properly distributed. We have to earn the necessary money before it can be spent. The Labour party's policy is to spend first and to find a way to meet the expenditure later.
After that series of interventions, I shall remind the House what the right hon. and learned Member for Monklands, East said. He wants to spend £5 billion extra on the National Health Service, £5 billion more on child benefits and £1·7 billion more on overseas aid. That would add up to 6p on the basic rate of income tax—but that is only for starters. Labour has made numerous spending


promises on education, employment and wages. All the trade unions have to be paid off with extra wages and extra remuneration—that is why they support the Labour party.

Mr. Skinner: The hon. Gentleman referred to the £1·7 billion which needs to be spent on overseas aid. I think that he said earlier that he would support spending that sort of money. I remind him that there is a relatively easy way to get the money. He knows that, in the past three years, the Government, by using various taxation measures, have allowed the top four clearing banks—Lloyds, Barclays, National Westminster and Midland—a sum of £1·9 billion to offset against other taxation liabilities because of Third-world debts. If a Labour Government decide—I hope they will—to give money equivalent to that £1–9 billion to the Third world to write off its debts, and not to bail out the top clearing banks, they will be taking a sensible and socialist step.

Mr. Wells: We are talking about two different sums of money—one that has been spent and is therefore a debt, and one that might be spent if the Labour party came to office. I correct the hon. Member for Bolsover on his statement that I am in favour of spending another £1·7 billion. I am not. I believe that we should aim to spend that sort of money if and where necessary. I have no idea whether £1·7 billion is needed or whether it is a larger or a smaller sum.
There has to be a way to write off Third-world debts. One way, as the hon. Gentleman just described, is to permit the banks to write off such debts against tax. That is a sensible way to do it, provided that we write off only sums that cannot be repaid. If we permitted Third-world countries not to repay, no one would invest in those countries, and what they need most is additional private investment—that is the engine of development in the Third world.
I shall return to the subject of Labour's tax policies, as some Opposition Members want me to do. Labour is firmly committed to increases in taxes and spending; there can be no doubt about that. That is an unpopular combination, and Labour knows it.

Mr. Tony Banks: Squeeze the rich.

Mr. Wells: We have just dealt with squeezing the rich, but it would not produce the money that the hon. Gentleman wishes to spend. As increases in taxes and spending are an unpopular combination, Labour spokesmen no longer talk about high taxes. That is one of the other circumlocutions. They prefer the phrase "fair taxes". To describe the swingeing new taxes on savings —which we shall come to later—jobs and homes and the imposition of higher taxes on millions of people on middle and lower incomes as fair must count as one of the most breathtakingly cheeky fibs of the century.
At least the last Labour Chancellor had the gall to get up and tell us that he wanted to clobber us with high taxes, that he wanted to make the pips squeak and that it was jolly well going to hurt. Now, apparently, we can spend all that extra money without his help. The new model Labour party has a different tactic. It says nothing and it hopes that the voters will not ask about tax. That strategy received its baptism of fire when the Labour party gave a pledge to keep details of the roof tax under wraps until the

local elections were safely out of the way. I hope that the electorate will not expect the Labour party to keep its policy on taxation under wraps until after the next general election.
On a number of occasions, when trying to discover the detail of the Labour party's plans, the shadow Chief Secretary—the hon. Member for Derby, South (Mrs. Beckett)—has urged those of us in search of a deeper understanding to spend £2·50 on her party's policy review document. I did, and I felt cheated. I want my £2·50 back. I felt entitled to read in that document something about the Labour party's new tax policy. I was astonished to find that its tax policy for the 1990s is much the same as that on which it fought and lost the last election. The review trumpets Labour's plans to abolish the ceiling on national insurance contributions, to do away with the married man's allowance, substantially to increase the burden of tax for higher earners—and to raise tax rates for many on basic rates of income tax.
That the review had merely dished up exactly the same tax policy as that which contributed so much to Labour's defeat prompts the question, what on earth did the policy group on tax do for two years? I was amazed to find that the Labour party still believes that the best way to make the poor rich is to make everyone poorer. It has learnt nothing from the 1970s, which is why we must concentrate on what it did when it was in office.
Despite the astonishingly penal tax rates, the great socialist nirvana failed to materialise in the 1970s. Living standards stagnated and, for many people, actually fell. That cannot be said about living standards under a Conservative Government. The recent report by the Select Committee on Social Services showed that, even with the recalculation of figures, the poorest of the poor had increased their income in real terms. Admittedly, it was not by as much as we had originally thought, but it was an increase. That is what is so important about Conservative policies—everybody, including the poorest in the land, benefits.
Under the previous Labour Government, an individual on just half average earnings—perhaps a shop assistant or cleaner—had a fall in real take-home pay of 0·5 per cent. Many people in the Labour party underestimate the importance of that. The person in ordinary employment paying PAYE thinks of his wage as what he takes home, not as the gross amount. He is not that interested in his tax; he is interested in his take-home pay. If the tax is so high that he takes home less money, the Labour party will find itself in trouble, and rightly so, with its trade union friends. What a disgrace—what a triumph for the Labour party—that a shop assistant should suffer a fall in his real take-home pay of 0·5 per cent.
Under the previous Labour Government, the average family man's take-home pay rose only a paltry 0·5 per cent. At the same time, the Labour Government managed to add about £170 billion, in today's terms, to the national debt. Under a Conservative Government, the national debt has been hugely reduced, so we are paying far less in interest rates. That has released money to spend on just the sort of services on which the Labour party says it wants to spend money—the NHS, education and social services. The previous Labour Government slashed capital investment in essential services such as schools, the NHS, the water industry and roads. I am sure that the electorate do not want that performance repeated.
Penal taxation erodes the wealth-creating capacity of an economy, and it is that factor that the Labour party simply does not understand. Nor does it acknowledge that wealth must be created if money is to be spent on social services.

Mr. Battle: Will the hon. Gentleman give way?

Mr. Wells: No, I think not. The hon. Gentleman may make his points in his own speech, if he is called.
High levels of taxation will do nothing to raise the living standards of people on low incomes. Over the past 40 years, real changes in income distribution have largely come about as a result of Conservative policies.

Mr. Battle: What?

Mr. Wells: Yes—through the increased ownership of homes, shares and pension rights. The driving force behind the spread of wealth in the 1980s was the extension of home ownership and the growth of financial assets among those who just 20 years ago would never have dreamed of owning their own homes or of buying shares. Conservative policies have given independence and personal wealth to individuals, rather than have the state take it from them.
The history of the past 20 years has proved that the only way to raise living standards for all is to spread opportunity and wealth. The ideology of helping the poor at the expense of those on middle or higher incomes has a long socialist pedigree, but it has never worked—and it never will. A free-market, low-tax economy provides the best guarantee of increasing prosperity and opportunity for all the people of this country. That is the policy of only one party—the Conservative party. It is an infinitely fairer system than the regulated, high-tax model that Labour wants to impose.
As we all know, economic forecasting is a notoriously difficult business. Labour and Conservative Chancellors alike have found it difficult. However, there is one economic prediction on which I would be prepared to put my money. It is that, between now and the next general election, Labour will go to any lengths to conceal the full impact of its tax policies from the electorate.
What a vote for Labour will cost very much depends on which Labour spokesman one believes. Interviewed on Sky Television, Labour's shadow Treasury team claimed that taxes will not rise under Labour. The hon. Member for Brent, South (Mr. Boateng) told Mr. Frank Bough:
We don't want to put taxes up.
The following week, Sky Television viewers were relieved to hear it from the horse's mouth, when the shadow Chief Secretary to the Treasury said quite emphatically:
No, we are not going to put taxes up.
Sadly, the leader of the Labour party is not quite so sure. He has said that some taxes will rise but that
the great middle band, the huge majority, let's call them the 25p people … would be no worse off.
In a later interview, the right hon. Member for Islwyn (Mr. Kinnock) spelled it out in typically forthright fashion. He said that Labour is not "intending to belt" the great majority of people.
Enter the shadow Chancellor of the Exchequer, to help clear up the mystery of who precisely will be in for a belting under a Labour Government. About a year ago, the right hon. and learned Member for Monklands, East let on that some people currently paying tax at the basic rate will pay more tax under Labour. That statement exactly

contradicts the Labour leader, who has promised that those to whom he referred as "the 25p people" would be no worse off.
Labour's latest position was set out by the shadow Chancellor last March, in the Sunday Mirror:
There would be more gainers than losers
under Labour's plans, and that in effect, anything up to 13 million taxpayers could end up with higher tax bills if Labour came to power. In just four months, the shadow Treasury team has gone from saying that taxes will not increase to saying that 13 million taxpayers could lose out. Ask a Labour spokesman whether he wants to increase taxes and one will get any of four answers—no, yes, just a little, quite a lot.
The confusion in which the Labour party finds itself is understandable when one examines what its tax plans will mean for ordinary earners. The most comprehensive and thorough analysis of them was undertaken by the City firm CSFB earlier this year. It concluded that, under a Labour Government:
Many taxpayers earning between £10,000 and £30,000 would be a lot worse off.
By doing away with the married man's allowance and the ceiling for National Insurance contributions, the report notes that Labour would inevitably hit many low and middle-income earners hard. It would be a hard, not a soft belting. According to the CSFB report, a married man on just £6,000 a year would be over £4 a week worse off. A married man with two children on one and a half times average earnings would lose to the tune of £25 a week. The report concludes that, for those earning more than £17,000 a year, there will be "dramatic increases" in marginal rates.

Mr. Battle: Will the hon. Gentleman give way?

Mr. Wells: The hon. Gentleman will have a chance to speak later. I should prefer to press on with my speech.
This is a serious study, produced by respected and independent economists. When pressed about the findings all that the shadow Chancellor could do was bluster and carp. Curiously, he did not even challenge the report's broad conclusions on the scale of losses likely to be suffered by many taxpayers on modest incomes. Unfortunately, Labour's ambition is to spend more and more taxpayers' money.

Mr. Nicholas Brown: I should like to challenge the report's conclusions. As he has laid his charges before the House, will the hon. Gentleman explain what assumptions underlie the calculations?

Mr. Wells: The assumptions, which can be read in the report which I commend to the hon. Gentleman, have to be based on what Labour party spokesmen have said. They have been very cautious and limited in what they have said and in what guidance they have given. However, we can read Fabian pamphlets; one was published in March. We have to take seriously what the shadow Chancellor of the Exchequer and the shadow Chief Secretary to the Treasury have said. The figures are based on those assumptions.
Unfortunately, Labour's ambitions extend far further than merely raising existing taxes: they plan to introduce a new raft of taxes. It is curious that the Labour party affected such support for the Chancellor of the Exchequer's recent Budget measures to encourage saving. The Labour party does not intend to encourage saving.
Given half a chance, the right hon. and learned Member for Monklands, East would introduce a Budget full of new taxes on savers.
Under Labour, a new tax on savings, probably set at 9 per cent., would be payable on top of the existing marginal income tax rates. For basic rate taxpayers, many of them pensioners who have built up an investment after a lifetime of saving, that would mean a tax on savings of about 34p in the pound. In addition, the existing allowance for capital gains tax would be abolished, or at least substantially reduced. There would be far heavier taxation of wealth, and personal equity plans would lose their favourable tax status.
Just as the Labour party does not trust the taxpayer with his own money, so it is deeply reluctant to let firms spend their profits. According to the so-called policy review, the fruits of cuts in corporation tax have been squandered on dividends and takeovers when they should have been invested. In reality, the 1980s witnessed an extraordinary investment boom, with firms expanding and improving capacity on a massive scale.
Investment rose faster throughout the 1980s in this country than in any other European country. In the eight years to 1989, total investment rose twice as fast as total consumption. That was an objective that the right hon. Member for Leeds, East was desperately seeking when he was Chancellor of the Exchequer. He was constantly urging more investment, but companies could not invest because there were no profits, and any profits that they made were taxed. We could expect that to happen again under a Labour Government.
Moreover, the share of gross domestic product spent on industry-funded research and development—a constant carp and a constant worry, and rightly so—rose from 0·9 per cent. before the reform of corporation tax to 1·1 per cent. in 1987. That, incidentally, is a higher proportion of the national income than in either Italy or France. So Conservative policies are working in this respect, too. Lower taxes have given firms the means and the opportunity to increase investment.
Labour's policy in these areas is consistent with its previous policies. Labour persists with the extraordinary idea that, if it were deciding how company profits were spent, the economy would be in far better shape. That is to say that politicians and civil servants will spend company's profits better than their directors and shareholders. Labour's shadow Cabinet is probably the last institution in the world, I am sure my hon. Friends would agree, that one would ask for investment advice, yet it plans to use the tax system to redirect company profits to what it regards as important areas.
Higher rates of tax would have to be introduced to pay for Labour's obsessive follies. Moreover, the tax system will be used to clobber firms that do not meet the criteria for research and development and training set by Labour. So much has been promised by the shadow spokesman on employment, who wants a compulsory levy for training on every company in the country. Labour will then spend the money as it sees fit.
To cap it all, the policy review contains heavy hints about the need to remove the £43-a-week threshold for

employers' national insurance contributions, and I have assumed when making these remarks that that is what the Labour party would do.
We can see from the Fabian Society's tax reform pamphlet issued in March 1990—it must be a gravel pit from which the Opposition mine many of their intellectual ideas—what the Labour party's tax policies might be. We see the introduction of either four rates of income tax or six. The first recommendation in the pamphlet reads as follows:
The present 25 per cent./40 per cent. rate structure for income tax should be replaced by a sequence of rates, which would start below the basic rate inherited from the Conservatives and rise to 50 per cent. by a series of steps. The initial rate of tax in this graduated structure should cover a relatively wide band.
What that does not say is that on top of that rise would be included national insurance contributions, so to any of these figures we must add at least a further nine per cent. to produce the real rate of income tax— —

Mr. A. J. Beith: The same goes for yours.

Mr. Wells: Indeed. To our 25 per cent. rate, and to obtain the proper rate of tax on most incomes, one must add 9 per cent., producing a total of 34 per cent. as the current rate of income tax. I can see no difference between income tax and national insurance contributions at this level of income. Seen in this way, 34 per cent. is a high rate and it needs to be reduced, but the Labour party's plan will increase it, for the vast majority of people.
The second recommendation in the Fabian pamphlet is:
The structure of employee National Insurance contribu-tions should be made fully progressive by abolishing the upper earnings limit, by charging a zero rate on earnings below the threshold. In the case of the self-employed, Class 2 contributions should be abolished and the lower thresholds for Class 4 aligned with that of Class 1.
So self-employed people had also better look out—they will have to pay a great deal more under Labour's plan.
This is as much as we can find out about what Labour's plans involve. They involve a very high level of tax and of spending. The Opposition cannot avoid taxing people on lower incomes—as well as those on higher incomes—to meet the demands that they have led their own people to believe they could meet if they were returned to office. But the Conservative party can meet these demands.
Among other things, the Labour party says that it would stop inflation—so far as I can see, this is its only policy to fight it—by joining the exchange rate mechanism. The mechanism has many merits, but it does not have the merit of being able to reduce Labour's profligate spending plans and prevent them from creating inflation. Under the ERM as it is now constructed, the Labour Government would hand over the country's policy on exchange and interest rates, in its entirety, to the president of the Bundesbank in the Federal Republic of Germany—which, by that time, would presumably be reunited with East Germany.
I believe that we should join the ERM, and, indeed, my party is committed to doing so; before that happens, however, we should renegotiate the arrangements with our European partners so that a policy-controlling body can be set up and Britain can be represented on it. That proposal would, I think, be popular with the Spanish, the French and the Italians: they too have said that they bitterly resent the setting of the exchange rate system and the policies involved in it by a single "central" banker


sitting in Frankfurt, with no legal responsibility to anyone other than the Chancellor of the Federal German Republic. I do not think that we should join the European monetary system until we have sorted out who controls it.
I also believe that we should do the opposite of what the Labour party proposes, and abolish capital gains tax altogether. It is inconsistent with the operation of an "enterprise culture", and with the aims of those who advocate investment in new industries and the taking of risks, to ask people to give the Treasury 40 per cent. of what they have earned over the years in which they have run a business when they sell that business.
Capital gains tax also impacts on many other forms of savings and earnings. It is a pernicious tax, but the Labour party intends to concentrate on—and, indeed, increase —such taxes of which most PAYE taxpayers know nothing. The Fabian Society pamphlet recommends a Labour Government to raise CGT and abolish inheritance tax. In effect, the Labour party intends to introduce a wealth tax, which will have an impact on anyone who owns anything—pictures, motor cars or shares.
There are many ways in which we should try to control inflation, and I am not sure that we should not begin to try some of Labour's proposals. I am appalled, for instance, by the way in which banks have pressed credit on everyone. They have a strange, lemming-like policy: they got themselves into a mess by lending huge sums to Third-world countries, for example, and they are doing the same kind of thing now.
Times of inflation are times of national difficulty, when it behoves the banks to cut down on credit as part of a national policy. It also behoves trade union leaders and members to hold back on wage claims. I think that a person taking out a mortgage should put down a 10 per cent. deposit from his savings, and that down payments should be made on nearly every hire-purchase transaction in the high street. This week's retail sales figures suggest that we cannot avoid considering such measures if we are to defeat the current inflation rates. Surely is it prudent and sensible Conservative policy to tell people, "First you must save, and then you must have the income against which to borrow." Otherwise, there will be inflation in the home as well as in the nation.
I believe that the next Conservative Government should again examine the possibility of merging the social security and tax systems. That, in my view, would bring about a fairer structure, which would be clear to everyone. It could be done without a vast increase in public expenditure, as was revealed by our late colleague, Sir Brandon Rhys Williams, in pamphlets issued after his death. I also think that a new Conservative Government should abolish the distinction between earned and unearned income.
In times of inflation, we should consider the enforceable bank deposit. The right hon. and learned Member for Monklands, East agrees with that, but my right hon. Friends in the Treasury reject it, on the grounds that it cannot be put into effect without a system of exchange controls. Let me point out that the Dutch Government are taking such action, and that it dries up the credit available in the high street very quickly.
I should like to see those programmes in the Conservative manifesto for the next election. Let us contrast them with Labour's promises of higher income tax, corporation tax, taxes on savings, taxes on wealth and

increased capital gains tax. Value added tax would probably reach huge proportions under Labour, which has never spoken of lowering the current rate of 15 per cent.

Mr. Battle: The Conservatives doubled it.

Mr. Wells: Yes, we doubled it, but Labour has not talked about lowering it.
Labour would undoubtedly be forced by its followers, and by its promises, to spend more on health, education and social services. Let me remind hon. Members, however, how much the present Government are spending on those items: because of the wealth that Conservative policies have produced, the amount represents well over half our total expenditure. That would not be possible under a Labour Government, who would be forced to spend more and more money that they did not have.
Unemployment will rise under Labour with the decline of productivity and our ability to compete. The trade gap will widen. It is, of course, much too wide now—that is one of our major problems—but under Labour matters would become far worse. If it narrowed at all—as it did under a past Labour Government—that would be because of a fall in production, which would lead to a reduction in imports because no one would have the money to buy them. That is the sort of equilibrium that Labour would introduce.
As I said at the beginning of my speech, the Labour Government would find themselves in the same position as the Walrus and the Carpenter: with no oysters—no taxpayers—left on the beach.

Mr. Tom Clarke: I have often had the opportunity to listen to speeches by the hon. Member for Hertford and Stortford (Mr. Wells) in debates on overseas development and aid. I must say that I enjoyed those speeches much more than I enjoyed today's. The hon. Gentleman sounds all the better for not being given a bit of encouragement by the Whips.
It is not surprising that we should debate this subject today, given the hammering that the Conservative party received in the local elections.

Mr. Nicholas Bennett: What about Wandsworth and Westminster?

Mr. Clarke: Despite what the hon. Member for Hertford and Stortford said, public expenditure there was used to subsidise the poll tax. That represents no victory for Thatcherism, so let us not pretend that it does.
The debate constitutes an attempt to deflect public attention from the poll tax and from inflation. Having seen the latest huge inflation figure, people are asking what on earth this 11-year experiment has been about, for we are worse off than when we started. High interest rates have also come as a great blow, not only to house owners—important though they are; we have seen the effect on their voting habits in mid-Staffordshire and elsewhere—but to those who run small and medium-sized businesses. They have derived no comfort from the hon. Gentleman's speech, or from the comments of some of his right hon. Friends when they visited Scotland recently.
The hon. Member for Hertford and Stortford talked about the problem of debt but did not deal as long as I would have liked with the problem of multiple debt and poverty for many people in many parts of Great Britain. My aim in seeking to catch your eye in this debate, Mr.


Deputy Speaker, was to submit that any taxation policy that does not take on board the issue of poverty in society will not work and will not carry with it the moral conviction that the British people would expect of any fair taxation system. I do not believe that the Government's approach to taxation is fair, so I am not surprised that the hon. Member for Hertford and Stortford did not deal with it. It is not simply a matter of broken promises, although broken they were, or the fact that the average family pays more taxation.

Mr. Nicholas Bennett: Will the hon. Gentleman give way?

Mr. Clarke: I shall give way only once because many hon. Members wish to speak and I do not want to dominate the debate.

Mr. Bennett: I am grateful to the hon. Gentleman. He claims that people pay more income tax. Is he aware that, if income tax rates had remained at their level on 3 May 1979 under the last Labour Government, at 33p in the pound, a man on average earnings with two children would pay £1,000 a year more now?

Mr. Clarke: Such a man would be fully aware that to concentrate on income tax alone—as the hon. Gentleman suggests—ignoring indirect taxes, VAT, prescription charges and the poll tax would be to turn on its head the reality of the past 11 years.
I am happy to respond to the point made by the hon. Member for Pembroke (Mr. Bennett) about comparing. What has happened since 3 May 1979? I shall add to the hon. Gentleman's examples. The average gain for a taxpayer earning less than £5,000 a year is £110 a year, whereas for a taxpayer on an income of more than £70,000 a year it is £36,060 a year, or £693 a week. Where is the fairness in that? Given the unfairness of the Government's policy, it is no wonder that the hon. Member for Hertford and Stortford and his hon. Friends have said hardly a word in defence of that policy. How could they? Where is the support for it? How can one defend a taxation policy that has meant that the nation's wealth has not been fairly shared?
Because incentives matter, investment in the manufac-turing sector has declined, and we are paying for it.

Mr. Jeremy Hanley: Will the hon. Gentleman give way?

Mr. Clarke: I said that I would give way once and I have done that. I hope that the hon. Gentleman will catch your eye later, Mr. Deputy Speaker.
Because of the Government's unfair taxation policy and the lack of investment in essential industries, unemployment is growing. I shall talk mainly about the problems in my region of Strathclyde. I do not complain about the fact that the hon. Member for Hertford and Stortford did not refer to Strathclyde, although he might have chosen other examples that showed the poverty among the unemployed, pensioners and single-parent families. The comments the other day of the chairman of the Conservative party about single parents did not sound fair to me.
The disabled and those who earn low pay under the Government also have problems. Many of them, especially

young people, do not now receive the protection that they had under the wages council system. Because we do not have a fair taxation policy, because social services are not properly supported and because we are hitting at social security, great problems are created for carers, ethnic minorities and young homeless people in Strathclyde and elsewhere. Many young homeless people who leave care cannot find homes or jobs or are earning low wages. It is unacceptable that the Government's taxation policy does not address their problem.
I thought that it was right in our debate on taxation to draw the attention of the House to the poverty theory, which has been exposed as a fraud but nevertheless is still perpetrated by the Government. They tell us about the "trickle down" effect. We saw in the recent. devastating report by the Select Committee on Social Services—which the hon. Member for Hertford and Stortford did not mention—that the poorest people are worse off since the 1988 social security reforms.
Far from a "trickle down" effect, we have heard of an important statistical error, which was acknowledged a day or two before the Easter recess in a written reply, as though it did not matter. It does matter, because that "statistical error" has had a considerable bearing on the Government's taxation policy and social security policy, in the absence of a strategy to deal with poverty in Strathclyde and elsewhere. In taxation, as elsewhere, the Government ignore the views of not only the Opposition parties but voluntary organisations, churches and others who are at the receiving end, who know what this hardship means, who see poverty as a reality day after day and who rightly object to a "statistical error" being treated in such a flimsy way.
The "statistical error" meant that the poorest 10 per cent., instead of enjoying an increase of 8·4 per cent. compared with an average increase of 4·8 per cent.—according to the Prime Minister and her Ministers—received a miserable 2·6 per cent. compared with 5·4 per cent. for the rest of us. We cannot sweep that under the carpet. Those figures and the Prime Minister's attitude to taxation influenced matters such as child benefit, which has been frozen year after year, and single payments, which have been abolished, the introduction of the notorious social fund and its loans instead of grants, and "cash limits" at local offices which have no regard for the poverty of applicants seeking succour.
Housing benefits were slashed. Hon. Members will know from their surgeries that elderly people and disabled people came to us in tears complaining not only about the Government's taxation policy, but the Government using the taxation system to subsidise the rich and ignore the poverty of the poor. On top of that, there was the poll tax, without reasonable rebates. The hon. Member for Hertford and Stortford is mistaken if he suggests that people did not pay attention to that in local and other elections. The "statistical error" was crucial in terms of poverty. I would have expected to hear about it in the hon. Gentleman's lengthy speech. Imagine what would have happened if a similar error had been made and there had been a miscalculation over mortgage tax relief. That would have been regarded as completely unacceptable.
Although it was perhaps not what Conservative Members intended, the House should take this opportun-ity to analyse what is happening in society and the reasons why poverty is being allowed to continue. In Strathclyde, 42 per cent. of unemployed people have been unemployed


for more than a year and 27 per cent. for more than two years. I regret to say that the anti-poverty strategy of my colleagues in Strathclyde regional council, to which Labour was re-elected with an overwhelming majority, is not reflected in any of the Government's priorities. The number of people defined as being in poverty in Strathclyde has doubled in the past 10 years. About 22 per cent.—nearly one quarter—of the Strathclyde population receive income support or are partners or dependants of income support claimants.
The problems of individuals, families and communities have not been addressed in the debate so far. Why are we not listening to organisations such as the Child Poverty Action Group which, incidentally, pointed out the error in the statistics long before the Government got round to announcing it themselves? Why are we not crying out for a solution to the debt problem—not the debt problem of 14 or 16 years ago but the debt problem that families in Britain are experiencing today? Nothing in the Government's taxation or social policies is aimed at helping them.
At the weekend, the Prime Minister made a speech in Aberdeen.

Mr. Tony Banks: "We in Scotland".

Mr. Clarke: This time she did not say, "We in Scotland," nor did she move a vote of thanks to the Scottish electorate. She could not have been expected to do that, given the hammering that the Conservative party received when the people of Scotland exercised their right to vote. Mr. Ewen Macaskill, a distinguished commen-tator in The Scotsman, said this of the Prime Minister's speech in Aberdeen:
There was one telling moment when she reflected once again the view held by an alarmingly large number of English Conservative MPs—namely, that England is subsidising Scotland.
Does not that tell us everything? Not only do we have a policy of unfair taxation under this Government; we have a Government led by a Prime Minister who is determined to create divisions in our society. I must tell her that such divisions are no more acceptable in Scotland than they are elsewhere. We take no solace in the fact that, so far from trickling down, the wealth of Great Britain is trickling up. The poor are suffering and there is poverty in every part of Britain. Poverty remains the blight on our society.
It is because I have every confidence in the policy of the next Labour Government on taxation, as on other matters, that I look forward to the British people having an opportunity to offer their indictment of the Government's policies. I am sure that they will do just that.

Mr. Jeremy Hanley: The previous speech was fascinating, in a debate in which Opposition Members have been invited to set out their taxation policies. The hon. Member for Monklands, West (Mr. Clarke) did not mention Labour's policies at all. He gave us the history of the past 10 or 11 years in a speech that was half baked and inaccurate. The hon. Gentleman refused to allow interventions—perhaps because they might have drawn him on the subject of the debate.
I should like to refer to some research that has been carried out into Labour's taxation policies. The research has not been easy, because it is well known that the Labour

party is trying as hard as possible not to mention its policies in case they get shot down. In the case of those of their policies that do not deserve to be shot down, Opposition Members are trying hard not to let us know what they are in case we happen to pick them up and run with them over the next 18 months. Believe it or not, on issues such as environmental protection, energy conserva-tion and the promotion of better recycling, the Labour party has some sensible policies. But being fit to be wombles does not make Labour fit to govern.
Let us examine the policies that we have been able to discover. The first is the phasing out of what was the married man's allowance. I do not know whether Labour Members are up to date on that. It is no longer the married man's allowance; it is the married couple's allowance. Because the Government have been forthright enough in their taxation policies to introduce almost complete equality between men and women through separate taxation for women, the married couple's allowance can now be allocated between a man and a woman if the income of the two suggests that that would be the best thing for them. Perhaps the Labour party has missed that fact.

Mr. Alice Mahon: Would the hon. Gentleman care to comment on the poll tax and the several and joint liability clause, which is most unfair, as many married women have no income whatever?

Mr. Hanley: The hon. Lady seeks to draw me into a debate whose subject does not appear on the Order Paper. The motion refers to the Labour party's taxation policies. I should willingly argue the case for a community charge that is more broadly based than the old rating system any day of the week, but today we must address ourselves to the Labour party's taxation policies.
As I was saying before I was gracefully interrupted, many married women with husbands on lower incomes than themselves will lose if the married couple's allowance is abolished. That surely cannot be right. If the Labour party looks at the matter again, it will realise how unpopular such a measure would be. But given the policies of some Labour-controlled authorities, I suppose that the Labour party could be accused of being anti-family. Perhaps Labour Members do not want people to be married. Perhaps they do not want to introduce legislation that encourages the family unit.
The second of the Labour party's taxation plans involves the abolition of the upper earnings limit on national insurance contributions and the conversion of the lower earnings limit into one allowance. My hon. Friend the Member for Hertford and Stortford (Mr. Wells), who so brilliantly introduced the debate and so thoroughly covered the subject, referred to that policy. Let us assume that Labour kept national insurance at 9 per cent. Although there is no basis whatever for such an assumption, because it would be consistent with Labour's announcement of what it intends to spend on the National Health Service for it to increase national insurance to 11 or even 15 per cent. The present upper limit of £16,900 is quite low, given the salaries that are common in industry today—especially with productivity bonuses added into pay. Many people would face a very large increase even if national insurance were kept at 9 per cent.
The third of the Labour party's personal taxation plans involves the introduction of a supplementary tax on


investment income. Greatly to their credit, the Conservative Government have stopped calling unearned income unearned income. It is now called investment income and it is considered perfectly honourable to receive income from saving money. There are differences of opinion on both sides of the House about speculation and hon. Members have differing attitudes to the making of capital gains through investment. No one would deny, however, that from the point of view of the national economy, it is better to save money than to spend it.
As far as we can tell, the Labour party would not distinguish between income from forms of speculation and income from deposits. Yet again we could have an investment income surcharge. It might be introduced for sums of more than £2,000 with a surcharge of 15 per cent. We might have figures similar to those which we had before—perhaps on a sliding scale, at 15, 20, 25 or perhaps even 40 per cent. I can well remember the giddy heights that investment income surcharge reached. On top of the 98 per cent.—the top rate of taxation on investment income under the Labour Government—a further surcharge of 5 per cent. was added, making taxation of 103 per cent. on those with high investment incomes.
Nevertheless, on the more modest level of investment income, such as that represented by pensioners, children with savings, inherited sums of money, or those receiving interest payments through banks or building societies, Labour would introduce an investment income surcharge and try to treat all investment as dirty money once again. Part of this Government's success has been in attracting investment to the United Kingdom from abroad. We have tried to attract people to invest during periods of high interest rates. There are now twice as many depositors as borrowers. The high interest rates do as much to encourage saving as to penalise debt.
The fourth aspect of the personal taxation plan that can be gleaned from the Labour party is to increase the top rate of tax from 40 per cent. to 50 per cent—and once national insurance is included, the top rate will be 59 per cent. I am told that that would raise £3 billion, so it seems most attractive. However, if that is meant to be an attempt to raise money to pay for Labour's highly inflated programmes, Labour must be mistaken.
The Labour party tries to claim that, under this Government's taxation policies, all the benefits have been given to the rich instead of to the poor. However, that is not right. For example, if we analyse the top 5 per cent. of taxpayers, under the last year of the previous Labour Government, that top 5 per cent. contributed 24 per cent. of income tax revenue. At the moment, the top 5 per cent. contributes 29 per cent. I believe that the figure will soon be 30 per cent. In other words, the wealthiest in our society are contributing more income tax.
Therefore, this Government's income tax policies are fairer and more sensible because they raise more money. The Labour Government taxed revenue away and removed the incentive to work and people's desire to invest in Great Britain plc. If a supermarket manager reduces his prices, he sells more goods. The same applies to tax. As tax rates have been reduced, the yield to taxation has been greater. This Government have been more sensible and fairer than the previous Labour Government. They have also managed to expand expenditure in every area of

government. By increasing taxes, the Labour Government had to reduce expenditure and the International Monetary Fund came to bale them out.

Mr. Beith: If that is the case, what is stopping the Government from achieving the 20p standard rate of income tax referred to in the motion?

Mr. Hanley: The 20p level remains the Government's stated policy. However, that level would be wrong in present circumstances. The hon. Member for Berwick-upon-Tweed (Mr. Beith) criticised the Government two years ago when a slump was threatened after black Monday. I believe that he criticised us at the time for not going far enough. Certainly the Labour part said that we had not put enough back into the economy. It was clear that what we put into the economy then, through reductions in interest rates and tax cuts, helped to fuel inflation.
Therefore, if tax rates were reduced to 20 per cent. now, that might encourage another spending spree just when we are trying to restrict retail sales. However, 20p remains a Government priority. Anyone outside the House, even someone with no economic brain, would understand that 20 per cent. income tax is more likely to be achieved by this Government than by a Labour Government.
The fifth part of Labour's personal taxation plan involves the introduction of a new series of income tax bands. As yet, they are unspecified, but it is probably true that they would start below 20 per cent.—perhaps at 19 per cent. It is unlikely that the bands would exceed 50 per cent. to start off with although of course we must add on national insurance to those figures. The Labour party claims that the tax burden would therefore increase only for the highest paid. However, that is most unlikely to be the case, particularly if indexation is stopped at the higher levels. If we add all the various figures together, more people would enter the higher rate bands, particularly with the restriction on mortgate interest tax relief that Labour would introduce.
The Leader of the Opposition said that the mid-£30,000 to £40,000 level would be the first to be hit. However, that is wrong. As I said, if the married couple's allowance is abolished, all married women, who can use that allowance for the first time, will be hit.

Mr. Battle: What about the poll tax?

Mr. Hanley: Rather like a parrot, the hon. Member for Leeds, West, (Mr. Battle) is trying to divert attention from the Labour party's income tax plans.
With regard to what the hon. Member for Leeds, West chooses to call the poll tax, the nearer we get to a general election, the closer men on average earnings might get to Labour's taxation policies. A consideration of next year's community charge in comparison to this year's charge—when for example the charge for boroughs throughout London will be so much lower, the nearer we get to a general election, the closer we will get to the increase in taxation that Labour is bound to introduce. That could mean £1,000 to £2,000 per person or per family. I believe that in comparison with Labour's income tax policies, the community charge is a welcome relief.

Mr. Battle: The poll tax is a form of taxation. However, many people cannot understand why women who do not work are charged the poll tax because of the regulation that states that husbands are responsible for their partners.
That applies to such an extent that disabled women receiving a disability pension must pay the full whack of the poll tax. How is that a fair tax system?

Mr. Hanley: I am sure that you would bring me to order, Mr. Deputy Speaker, if I tried to explain that. However, for the sake of good order, if all married women were exempt from the poll tax, the rates would have to rise commensurately higher for everyone else. Therefore, the benefit to a couple would be almost wiped out immediately. The hon. Member for Leeds, West is talking nonsense.

Mr. Chris Butler: Is not the community charge a very interesting indicator of how the Labour party would act in government? The local authority in my consituency of Warrington is Labour-controlled, and Cheshire county council is run on a Labour budget. We have experienced an increase in the community charge, which translates into an increase in the rates—if they still existed—of 52·3 per cent. this year. Is not it true that the Labour party is a high spender locally, just as it would be nationally?

Mr. Hanley: My hon. Friend has made a most effective point. I am sure that the people in west London who have learnt what living under Labour means, are now living under Conservative-controlled authorities for the reasons given by my hon. Friend the Member for Warrington, South (Mr. Butler).
I have gleaned more information about Labour's personal taxation plan. For example, the personal allowance would be converted into a zero rate band so that, when it is uprated for inflation, all taxpayers would gain the same amount. That sounds like a pleasant policy that would benefit those at the bottom rather than those at the top. However, the cost would be about £1·4 billion and it seems that two thirds of the people who would be affected by the change are already on the basic rate of tax. While one third are on the higher rate, two thirds of people on average incomes would be hit.
It seems that Labour would continue mortgage interest relief at the single rate, probably equivalent to the basic rate of relief that it inherited, and that higher rate relief would end. That would probably gain Labour £0·5 billion. However, that would also throw more people into higher rates.
Labour also apparently intends to restrict tax avoidance by high income earners by setting a minimum proportion of income that would have to be paid as tax. That has some attractions, and I do not dispute that it would be an interesting way of continuing this Government's drive to reduce tax avoidance. This Government have been stronger than any Government in trying to catch people who avoid tax. Therefore, I have no argument with that policy.
Labour would apparently also reduce the threshold for capital gains tax. That is yet another savings disincentive. As my hon. Friend the Member for Hertford and Stortford said, Labour's policy is anti-savings. The Labour party seems to be trying to cane those whom, for some reason, it disapproves of for earning money through investments. Reducing the capital gains tax threshold would hit London as a financial market, to the benefit of markets in other countries. There is little doubt that investment into the United Kingdom would begin to dry up. In fact, the existence of a Labour Government would

probably encourage that in any event, and I have already mentioned that Labour would introduce investment income surcharges.
As the hon. Member for Leeds, West has mentioned the poll tax with unfailing regularity, let us look at exactly what Labour would put in its place. The Labour party would value properties and houses for its roof tax or would introduce a local income tax and a property tax combined. In either event, it would value properties. Would that be the forerunner of a full-blown wealth tax? I doubt whether a Labour Government could resist introducing a wealth tax, under which occupational pensions would be taxed. A whole range of so-called "wealth" would be taxed in addition to income tax. Gifts and inheritances would be taxed at the point of receipt. People would be hit for saving and then passing on their money. That would be another disincentive to saving.
I have managed to find some of Labour's corporate taxation plans. They include the abolition of the uniform business rate. Labour Members referred to that time and again during the local elections, saying that business rates should be set locally, not centrally. I remind them that the uniform business rate was introduced to try to redistribute wealth throughout the country.
All that I heard from representatives of both Opposition parties during the previous general election campaign was that there was some sort of north-south divide. However, when the Government introduced the uniform business rate, which, I am sure it is true to say, is a form of social engineering, which moves money from the south to the north and encourages employment in the north, they were criticised for doing so.
To an extent, the uniform business rate could be said to discourage employment in the south where unemployment rates are so low——

Mr. Allen McKay: rose——

Mr. Hanley: The hon. Gentleman has not been here for most of my speech. He has just come in, but perhaps he would like to warm up with an intervention.

Mr. McKay: As the hon. Gentleman is talking about the uniform business rate and businesses as a whole, does he agree that it would be far better if industry in the north received the benefits now rather than having them phased in over the next 20 years?

Mr. Hanley: I am glad that the hon. Gentleman admits that there are benefits to the north. Any benefits to the north must be paid for by businesses in the south, which is why it is only right that the scheme should be phased in gradually. Phasing in is not only sensible, but humane. It is wholly sensible to help the small businesses in the south in that way. The hon. Gentleman has let the cat out of the bag by agreeing that the uniform business rate brings benefits to the north.

Mr. McKay: rose——

Mr. Hanley: I am sorry, but I cannot give way again. I have already given way about seven or eight times——

Mr. McKay: rose——

Mr. Hanley: Well, this is the last time.

Mr. McKay: I am grateful to the hon. Gentleman for giving way. It is not a case of letting the cat out of the bag,


because Labour Members have always accepted that some benefits will come to the north. However, although the north benefits in that way, it loses per person on the poll tax. If the hon. Gentleman wants me to go into that, perhaps I shall catch your eye later, Mr. Deputy Speaker.
The leaders of the chambers of commerce and industry in the north are saying that those benefits will not accrue purely and simply because of the time that it will take for the balance to take effect.

Mr. Hanley: The hon. Gentleman has not added much to the argument. He has said merely that chambers of trade and various trade bodies would like the benefits to the north to flow more quickly. The fact remains that it is this Government's policy that has produced those benefits and that they are now coming through. The hon. Gentleman is simply saying that he is impatient to receive those benefits more quickly. That is fine, because I am sure that, if the Government are retained in power, they will bring the benefits forward more quickly than at the moment, but for now they must be cautious in their economic policy.
As part of its corporate taxation plans, the Labour party has stated that it would reinstate capital allowances, which were an absolute nightmare of a system. I concede that certain allowances for the film industry would be welcome and are deserved, but to reinstate capital allowances lock, stock and barrel would be a reversal of progress. The Labour party has also said that it would withdraw the tax breaks that are offered to private landlords through the business expansion scheme. That scheme was introduced to try to help the homeless, by providing an incentive to create the properties that would house the homeless. I am therefore surprised that the Labour party wants to ditch that policy.
The Labour party also states that it would stimulate research and development, education and training, and regional economic development through tax incentives or allowances. That sounds great, but I am afraid that we would also see a jobs tax. I know that the stated 0· per cent. payroll tax was conveniently removed from Labour's policy as soon as there was an uproar when it was announced. That statement has now been dropped from public display, but I am absolutely certain that it would be back as soon as the general election was over.
The Labour party seems to be full of ideas that will not be disclosed until Labour is elected. I wonder how much of its policy it can try to keep secret. The list that I have given has been gleaned from a copious amount of work by many people, but the bottom line is found in the one positive statement that we have heard from an Opposition Treasury spokesman, the hon. Member for Islington, South and Finsbury (Mr. Smith). His summary of the major taxation changes that the Labour party would introduce included lower rates of VAT on recycled materials, energy-efficient goods and insulation materials and higher rates on packaging that cannot be recycled. That is great in itself, but it is not a taxation policy for the nation as a whole.
The hon. Gentleman also stated that there would be additional allowances against corporation tax to encourage the reduction of pollution. Great—we all agree with that. He stated that there would be a grading of car tax, with owners of small cars paying less than the present

£100 and owners of large cars paying considerably more. That idea has been mooted by Conservative Members as well. Although it would be a nightmare to administer, it is nevertheless part of the great taxation plan of the hon. Member for Islington, South and Finsbury.
The hon. Gentleman also stated that there would be an increase in the leaded-unleaded price differential. Who invented the differential between leaded and unleaded petrol? This party in government created that differential so successfully that the Labour party is now choosing to pick up one of the jewels in our crown——

Mr. Nicholas Brow: indicated assent.

Mr. Hanley: I note that the hon. Member for Newcastle upon Tyne, East (Mr. Brown), who is sitting on the Opposition Front Bench, is nodding.
The hon. Member for Islington, South and Finsbury also said that there would be zero VAT on catalytic converters and lower taxes on sales of new cars that are fitted with such converters. I am sure that that will be the case when converters are in general use. Indeed, the Government have agreed a policy for changing to catalytic converters. The hon. Gentleman also said that there would be higher duties on company cars to raise an additional £500 million. I remind him that this Government have increased taxation on company cars as a benefit in kind by 350 per cent. in the past four years. Surely the Labour party will give us some credit for trying to remove that perk.
I have set out some of Labour's policies, and as we have seen, the Labour party has three major plans. It plans heavier taxes, higher taxes and more taxes. If one adds up all the spending promises from Labour's Front-Bench team, one realises that there is no way in which they can achieve them other than by those three policies.
The Leader of the Opposition has said that the huge majority of taxpayers will not be any worse off, but that does not stand up to any form of scrutiny. Research by Credit Suisse/First Boston has shown that by the removal of the married man's allowance, which is now called the married couple's allowance and the removal of the national insurance contribution upper limit, a married man without children, earning £6,000 per year, would be £4 a week worse off. The report suggests that those earning more than £17,000 a year would suffer dramatic increases in marginal rates.
As my hon. Friend the Member for Pembroke (Mr. Bennett) said earlier, if the tax rates of the previous Labour Government had been indexed to today's prices, they would mean that a person on average income would be paying £1,000 more per year in taxation than under this Government.
The Government have been fair to all. By reducing the rates of tax at the top, they have provided an income so that people at the bottom end of the social scale, such those in need of improved health and pensioners, can be protected and have the money that they so desperately require. Under Labour Governments, higher taxes drive away investors and the means to be able to support the economy, to build hospitals, housing estates and prisons —a Labour party demand. Therefore, the Labour party's taxation policies are cynical and Labour's silence is shaming. The report, "Labour's new policies: the complete guide", describes the hon. Member for Newcastle upon Tyne, East as a


good House of Commons type with competent, aggressive style in debate. Up and coming.
Therefore, I hope that the hon. Gentleman will show the House that he is up and coming, that he will stand up, be honest and set out his party's income tax policies.

Mr. Gow: Read it again.

Mr. Hanley: I shall willingly give my hon. Friend the report, which sets out a potted history of some of the leading lights, and then happens to mention that none of them has said anything about taxation. I hope that the hon. Gentleman will prove the truth of the report by coming clean on Labour's policy. If he does, he will remain an Opposition spokesman.

Mr. A. J. Beith: One would not think from the remarks of the hon. Member for Richmond and Barnes (Mr. Hanley) that the Government have increased the overall level of taxation above that which they inherited and shown themselves to be a Government of high taxation. The changes that they have made have been in the structure of the tax system, and a number have been seriously to the detriment of the least well-off in our society.
The hon. Gentleman also needs to talk to some of his hon. Friends about the impact of the uniform business rate. Not only are the potential benefits of the uniform business rate for the north delayed to such an extent that they show no likelihood of an early influence on the location of industry, but the system is hedged about in such a way that any firm that considers moving in or from the south will lose protections to such an extent that it is not likely to move. The uniform business rate system is not likely to achieve the claimed benefits of a shift from the south to the north. That message is coming quite clearly, not just from the Opposition, but from Government Members.
I hope that it is not unkind of me to intervene in this exchange between two other parties about taxation policy. Any such exchange is made that much more difficult in the light of President Bush's recent public disclaimer of his earlier, well-known and dramatised pledge that there would be no new taxation. He said:
Read my lips—no new taxes".
Will anybody ever again believe a politician talking about a tax promise after President Bush so publicly disavowed his?
When talking about tax proposals and promises, as way of introduction we must look a little more closely at the basis of the argument advanced by the hon. Member for Hertford and Stortford (Mr. Wells) on the Government's behalf. To argue about taxation policy without making any reference to the fundamental change involved in the poll tax, or community charge, is misleading. The poll tax has hugely shifted the burden of paying for local government services through a form of taxation that has an extremely severe impact on large numbers of people on modest incomes and some on low incomes. It redistributes money in the direction of the most well-off in our society.
There have been enormous gains under the poll tax system for those who previously paid high rates because they are wealthy and live in large and expensive houses. There are many people on low incomes who face enormous increases in personal taxation because of the impact of the poll tax. They are paying hundreds of

pounds a year more than they previously did per family or household in order to meet this frightening new tax. I can genuinely say that I have never seen such extensive distress in my constituency surgeries as that tax introduced—certainly not from any change in the taxation system that has occurred in the 16 or 17 years that I have been a Member. That is a part of the background that Conservative Members cannot deny or disavow.
Conservative Members must also take into account the difficult position in which the Government finds themselves over the pledge of 20p income tax referred to in the motion tabled by the hon. Member for Hertford and Stortford. It was perhaps unfortunate that he tabled his motion last week before the Chief Secretary to the Treasury appeared on television at the weekend to say that, after all, the Government would not be able to manage it, and there was no prospect of the 20p pledge being implemented this side of a general election. He said that, not because the Government have suddenly found that they cannot meet the bill, but for a quite different reason. It may turn out that, if privatisation revenues fall, as they look likely to do in the shambles of electricity privatisation, that the Government cannot make the books balance. But that is not the present reason. It is one of general economic management and the fear of inflation.
At the time of the Budget, the Chancellor made much of the idea that fiscal policy could not involve fine tuning of the tax system and it was inappropriate to try to combat inflation by adjustments in the tax policy. However, that is precisely what the Government are doing. They have a declared objective of reaching 20p in the pound income tax, but they are currently engaged in an adjustment and saying, "Sorry, we cannot do it, because if we do, we think that, just as last time when we cut taxes there was a big increase in demand, so there will be if we do so again, and, as a result, inflation will get worse." I am glad that the Government have got the message at last, and I wish that the previous Chancellor had got the message.
I wonder what the Government would do if they ever attained their objective of 20p in the pound income tax. That is their policy goal and presumably, having reached that point, they do not make any further changes in income tax levels—up or down—so how do they cope with the circumstances in which they now find themselves when they are under threat of severe inflation? How do they make adjustments to cope with inflation when we are in the exchange rate mechanism of the European monetary system if they cannot use the taxation level for that purpose?
In the European monetary system, the interest rate weapon will increasingly be used at the behest of the system as a whole to preserve the exchange rate parities in the system. Therefore, it will be necessary to use other instruments to deal with domestic inflation. The Financial Secretary shakes his head, but it will come to that. He will have to look for other instruments to deal with domestic inflation. The limitations of interest rates for that purpose are already apparent in the difficulties in which the Government find themselves. They cannot put up interest rates any more at present, because it would be so politically unpopular, but sooner or later they may find themselves obliged to do so. However, they are under much greater political restraint than ever before because of the huge burdens borne by many home buyers and small businesses.

Mr. John Butcher: I think that the House would welcome a comment from the hon. Gentleman about whether the Social and Liberal Democrats still believe in supply side economics. If recent evidence shows fairly conclusively that reduction of the top rates of income tax not only increases the total tax take to the Treasury, but the proportion paid by the better-off, surely that is a philosophy very much in line with the old-style Liberal economists of the last century. Bearing in mind the fact that the reduction in interest rates pumps in proportionately more purchasing power than does a reduction in taxation rates and the phenomenon that I described adds to the budget surplus, surely that is also non-inflationary. I am not trying to interrupt the hon. Gentleman's flow, but I think this is a useful opportunity to let us know how the thinking of the Social and Liberal Democrats is going.

Mr. Beith: Part of the hon. Gentleman's thesis was wrong. Reductions in personal taxation at a time of much greater credit liberalisation generated demand and created the severe inflationary pressures that we are now experiencing. The Government, and Chancellors appear-ing before the Select Committee on the Treasury and Civil Service, have admitted that. However, I agree with the hon. Gentleman that the high levels of personal taxation that existed under previous Governments and the absurd levels of 98 per cent. taxation on investment income were wholly inappropriate, and it was right to get away from that level. I have been talking about the economic judgments that Governments must make. It remains the case that, in deciding to make a cut in standard rate at the time that he did, the previous Chancellor took part in a series of miscalculations that have left us with our present inflationary problems.
I still do not understand why the Government disavow the use of the taxation system as a means of regulating inflation at a time when they are engaged in precisely that. Again and again Conservative Members have told me that it is their intention to reduce the basic rate of income tax to 20p in the pound. They are not doing so, because they believe that they will create more inflation if they do. Let us have a little more clarity on that.
The object of the debate is to try to tease out Labour's taxation policy. We must leave some time for that important task, because not much progress has been made on it so far. If the experience of the local elections is anything to go by, Labour will continue its policy of saying as little as possible. Its alternative to the poll tax was unstated, or at least confused, throughout the election campaign. It was to be some combination of a property tax and banding to take account of income. The combination never became clear.
It seemed to many people—including, I suspect, some Labour Members—to be an unnecessarily expensive as well as a confused tax because it involved two mechanisms —the valuation of property and the assessment of income. That leads me to wonder why Labour does not adopt our proposal for a local income tax, which seems an eminently more sensible procedure. Labour's habits of silence were well illustrated during the local election campaign, when it could not tell us its alternative to the poll tax.

Mr. Battle: Will the hon. Gentleman give way?

Mr. Beith: I will gladly give way to the hon. Gentleman, in the hope that he will tell me something about this matter.

Mr. Battle: I am puzzled by hon. Members who say that there is some difficulty about two concepts being held together. Under the rating system, linked to the benefits system of rebates, two different systems worked and interacted.

Mr. Beith: Yes, but I do not see why, in seeking to assess revenue for local authorities, we should go to the trouble of valuing property all over the country, which is not a particularly good guide to income, while at the same time assessing income and then trying to combine the two assessments. The old system was not particularly good, but the poll tax is infinitely worse. It is possible to have a system that is better than either, and I do not understand why Labour does not want to do so. I suspect that it is part of the policy of not saying what it proposes to do.
The Budget discussions also revealed ample evidence of that. In the immediate prelude to the Budget, the shadow Chancellor produced a two-page typed statement containing the Labour party's alternative to the Budget. On reading that, one would suppose that it might be possible to have lower inflation, a lower trade deficit and no significant increases in taxation for most people. The statement was noted more for its brevity than for anything else, and I suspect that it too was part of a policy of not really saying anything very much.
I have known the right hon. and learned Member for Monklands, East (Mr. Smith) for many years, and I think that that is his line. He may well have ideas about what he wants to do, but he does not propose to tell anybody just now, because people will only disagree with him and make trouble, and it is far easier to take office with no commitments at all. After all, parties have done that before.
Labour's attempt to claim economic credibility rests on the belief that the right hon. and learned Gentleman will be as strict and successful in containing public spending and inflation as he has been in containing his weight since the illness from which we were all so pleased to see him make such a good recovery. How he manages to do it while attending all the City lunches and dinners that he is supposed to attend I do not know. He has been extremely successful in self-discipline. The belief that he can somehow extend that discipline over the entire breadth of the Labour party seems wholly misguided. It is leading to a situation in which Labour would be unprepared for government even if there were some real prospect of it reaching government.
The right hon. and learned Member for Monklands, East has led many of his hon. Friends to believe that all sorts of laudable objects can be achieved without significant pain or difficulty, except to a few rich people whom Labour assumes will not vote for it anyway. Some of the richest houses at which I call during by-election campaigns are the ones in which I have located the Labour votes. The problem of a party that has not prepared itself for the most difficult decisions of government seems especially well illustrated by a letter that appeared in The Independent this morning. It is signed by the right hon. Member for Chesterfield (Mr. Benn) and 11 of his hon. Friends. It states:
In your leading article last Monday (7 May) you refer to an interview published in the Independent on Sunday with


Labour's Shadow Chancellor, John Smith, explaining various proposals of the Shadow Cabinet. This interview detailed a number of policies which have not been adopted by the Labour Party, including Exchange Rate Mechanism entry in order to pursue a deflationary policy, and the dumping of our commitment to full employment.
Later, the letter states:
Such policies would place a Labour government on a collision course with both the trade union movement and the electorate.
The right hon. Member for Chesterfield and his 11 hon. Friends who happened to be around when the letter was signed are clearly unprepared for some of the measures that the right hon. and learned Member for Monklands, East hopes to implement in the name of a Labour Government. Those 12 hon. Members say that they are not Labour policies, but there may be more than 12. If there is any possibility at all of a Labour Government after the next general election, there is not much chance of a Government with a majority of more than 12, and I suspect that that group of hon. Members or others will display their unpreparedness for such policies in no uncertain terms and will make it impossible for the right hon. and learned Gentleman to go on with a series of policies that are being kept under wraps until Labour comes to office. Even if it were a potentially useful electoral device, the policy of silence on taxation cannot prepare a party for any kind of effective government. It will certainly not assist in the taking of some difficult decisions.
Until the recent local govern-ment elections, government for my party seemed a rather remote prospect, but my party has been prepared to say what it believes. It has set out in detail its policy on local income tax and on tax reform. It will cost the hon. Member for Hertford and Stortford £1 more to buy our document on the subject, because there is a great deal more in it. I am sure that, when he looks at our policies, in more detail, he will not ask for his money back.
They include things that he says he favours, such as the integration of the tax and benefits systems and an attempt to introduce a citizen's income system as part of a more effective attack on poverty than can be achieved merely by tax allowances and benefits which depend on take-up, let alone by a level of child benefit, which is being deliberately eroded by the Government.
During discussions on the last Budget, we said that we were prepared to bring forward a number of those measures in order to tighten the fiscal stance this year because of the inflationary pressures that are so apparent in the current year. The hon. Member for Hertford and Stortford is right to put this matter on the Parliamentary agenda and to try to open up a more public discussion on tax policy for the future. I hope that, before the end of the debate, we will learn just a little of what Labour has in mind.

Mr. Ian Gow: I am happy to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith), who, I suppose, could be described as the shadow Chancellor of the Exchequer for the Liberal party. I noted with keen interest his observation that an income tax rate of 98 per cent. was unsustainable and indefensible. During the notorious Lib-Lab pact, the hon. Gentleman and his party supported a Government who imposed upon the British people precisely that level of taxation.
That comes as no surprise to any hon. Member, because the previous leader of the Liberal party instructed the delegates to the Liberal party conference before the last general election to go back to their constituencies and prepare for government. His predecessor at the 1979 general election promised to lead the Liberal candidates towards the sound of gunfire. From the Liberal party, we have a never-ending series of myths, and hon. Members who want further examples of mythology should commit to memory from tomorrow's Official Report the speech by the hon. Member for Berwick-upon-Tweed.
The House should be grateful to my hon. Friend the Member for Hertford and Stortford (Mr. Wells) for initiating this most important debate. Its importance is underlined by the presence on the Back Benches of the hon. Member for Newham, North-West (Mr. Banks) who I hope will shortly catch your eye, Mr. Deputy Speaker. The hon. Member for Newham, North-West is very perspicacious. He is in his place on this important occasion, but the importance that he attaches to the debate is not, alas, shared by all his right hon. and hon. Friends.
The subject of taxation cannot be divorced from the subject of spending. What should be the level of spending by Governments and how that spending is financed is at the heart of this debate. It is perfectly true that, from 1974 to 1979, there was a dramatic increase in public spending, but there was also a dramatic increase in taxation. Even the increase in taxation, however, was insufficient to meet the vaulting spending plans of the then Government. Even that Government did not dare to impose sufficient taxes to meet spending. They tried to borrow to bridge the gap between spending and revenue, and when they were unable to borrow enough to bridge the gap, they resorted to the printing presses. Those vaulting spending plans and the subsequent inability to raise the money to finance them would be reproduced if ever there were another Labour Government.

Mr. Tony Banks: rose——

Mr. Gow: I shall give way to the hon. Gentleman in a moment. He knows that there is no speech that I shall make in this House when I will not give way to him.
Should a Labour Government be elected, the same gap between spending and revenue will emerge and it will be met in the only way possible, by the printing presses. I shall now give way to the hon. Gentleman, whom I almost call my hon. Friend.

Mr. Tony Banks: That is probably the most complete demolition job that has so far been done on me in this House.
I cannot blame the hon. Gentleman for concentrating on what he would consider to be the downside of the Labour Government's economic record. Will he also accept, however, that, during that period, the unemploy-ment rate was conspicuously lower that it is now, that the balance of payments in trade in manufactured goods was healthy and not in deficit as it is now——

Mr. Tom Clarke: And that was without oil.

Mr. Banks: Yes, my hon. Friend is right. Interest rates were considerably lower than they are now and inflation on a downward turn. In the interest of fairness, I am sure that the hon. Member for Eastbourne (Mr. Gow) will be prepared to put that side of the argument.

Mr. Gow: I shall make my speech in my own way, subject to my earlier undertaking that I shall, of course, give way to the hon. Gentleman if he seeks to intervene again.
I am glad that the hon. Member for Newham North-West referred to inflation and I am glad to have the opportunity to comment on it in the presence of my hon. Friend the Financial Secretary, who I hope will shortly be my right hon. Friend the Financial Secretary. I shall give way to my hon. Friend if he wants to intervene on my analysis about inflation—I give him the same undertaking as I gave the hon. Member for Newham, North-West.
Only Governments can cause inflation, and only Governments can cure it. It follows 11 years and more after my right hon. Friend the Prime Minister became First Lord of the Treasury that those who sit presently upon the Treasury Bench, and only those—I suppose that the Financial Secretary might say that my right hon. Friend the Member for Blaby (Mr. Lawson), who no longer sits on that Bench, bears some responsibility in the matter, so perhaps I should say, only those who have been or are on the Treasury Bench—are responsible for the present level of inflation.
Inflation is a disease of money and it can be ended only by a monetary cure. It is a matter of deep regret to me that, 11 years and more after a Conservative Government came into office, we have inflation at 9·4 per cent. and probably rising. I hope that the Financial Secretary and his colleagues in the Treasury will re-learn the lesson that some of us thought that they had learnt—that only a strict monetary policy will control the evil of inflation. When I say "control", it is a misuse of language. I have noticed that some of my right hon. and hon. Friends now refer to the control of inflation, but that was not the undertaking given in the manifestos of 1983 and 1987. Those manifestos referred to the goal of the Government as stable prices, which is zero inflation.
It is possible through the proper use of monetary policies to abate and eliminate the evil of inflation. During the lifetime of this Government, we have had inflation down to 2·5 per cent., but that was still 2·5 per cent. too high. If one can bring inflation down from 26·9 per cent. —the highest level under the Labour Administration—to 2·5 per cent., one can certainly get it down from 2·5 per cent. to zero. That should be the policy of my hon. Friend the Financial Secretary, and it should be the policy of the Labour party when it comes to submit its policies to the electorate.
The Labour party, however, will not make that commitment to the elimination of inflation, which was a commitment made by the Conservative party in 1983 and 1987. The Labour party will not do so because it does not believe in honest money and sound finance. If Labour party policies are ever implemented, I fear that there will be a dramatic increase in taxation, a dramatic increase in spending, a massive fall in confidence in sterling—even the Labour party will then be obliged to put up interest rates —and a diminution of confidence in this country. Many of the ablest people will leave the United Kingdom to seek freer countries.

Sir Geoffrey Finsberg: My hon. Friend is making one mistake by constantly referring to "when" the Labour party produces its policies, as if he

really believes that it will produce those policies in time for them to be costed, so that the electorate can see the folly into which they are being led.

Mr. Gow: My hon. Friend may well be correct. Hitherto, the Labour party has sought to conceal, and will continue to seek to conceal, the reality of what will happen. I have predicted what would happen if a Labour Government were ever to be elected. It is the duty of Conservative Members, which is why I am grateful to my hon. Friend the Member for Hertford and Stortford, to fill some of the gaps that are clearly and deliberately left by the Labour party.
A policy of high taxation and high spending brings with it dangers for the British people. I have been in this place for the twinkling of an eye, but nothing has happened in the past 16 years to lead me to believe that Governments are able to spend money more wisely and effectively than other people. The policies of my right hon. Friend the Prime Minister, however, have had a significant effect, because, when the hon. Member for Newcastle upon Tyne, East (Mr. Brown) comes to give the view of the official Opposition, even he will not say that the Labour party will go back to 98 per cent. levels of taxation on income.
When the hon. Member's party left office, that was the level of taxation, but he will not say that his party will go back to that level. Why? Because my right hon. Friend the Prime Minister has moved the centre of British politics to the right and has occupied the middle ground, dragging with her—with considerable reluctance, it is true—even some Labour Members. I do not want to be unfair to the hon. Member for Newham, North-West, but if he had his way, and if he were ever to be a Treasury Minister, he would not be satisfied with a 98 per cent. tax on income —he would want to go above 100 per cent. Some Labour Members feel a deep sense of envy and think that the purpose of taxation is not to raise revenue—although they frequently raise revenue with higher rate taxes—but to pursue the politics of envy.

Mr. Tony Banks: The hon. Gentleman must realise that, for people with certain levels of income, in particular those caught in the poverty trap, marginal rates of tax can be 100 per cent. We have to get people out of that trap. Is the hon. Gentleman not aware that the percentage of gross domestic product that is paid in taxes, adding indirect and direct taxes together, is more under the present so-called low-tax Government than under the Labour Government in 1978–79?

Mr. Gow: Mercifully, the economy is more buoyant now. The hon. Gentleman is wrong, because the average taxpayer is paying considerably less tax now. If the Opposition's policies were introduced, the burden of taxation would massively increase.
The House of Commons is the right place to discuss the central issues of how much Government should spend and how the money should be raised to cover that expenditure. The danger to Britain would be if we returned to a Government with precisely those vaulting spending ambitions that the Labour Government had in the past and to a similar increase in the burden of taxation. If we were massively to increase spending and taxation the prospects for this country, for fuller employment and for higher living standards would all be put at risk.
I congratulate my hon. Friend the Member for Hertfordshire and Stortford, and I commend his opening speech.

Mrs. Alice Mahon: What I find most galling about the setpiece of pure Tory party propaganda that we have today heard is that it appears to take most of its evidence from Fabian Society pamphlets—Conservative Members have the advantage over most Opposition Members who do not read them—or from the fantasising of two obscure Americans, Keating and Franklin, who produced what is probably an expensive report, the Credit Suisse/First Boston report, which made a number of assumptions about Labour policy that are wrong and deliberately misleading. They assume that they know what would be in Labour's first Budget and also what would be in the next four or five. I would be interested to know if they considered Tory plans for 1997, should we be so unlucky as to have the Conservatives elected to government again. The report also omitted the fact that Labour would be applying the Rooker-Wise indexation formula to higher rate thresholds and hands of tax. To pretend that we would not is absolute nonsense.
Let us consider the Government's tax record. I am not surprised that Conservative Members do not want to examine that, because, despite all their claims to be the party of low tax, they are not. The truth is that the overall burden of taxation has increased considerably under the Conservative Administration for those in the lower income groups.
In 1979, a married man with two children on average earnings paid 35 per cent. to the state in income tax, national insurance, rates, value added tax and other indirect taxes. By 1989, a worker on average earnings paid 37·3 per cent. to the state. At the lower end of the income scale, for a married man with two children earning half the average wage, the tax bill has risen from 2·5 per cent. to 7·1 per cent. since 1979. I admit that it is not all doom and gloom under the Tories. If a married man with two children earns 20 times as much as the national average —roughly £5,000 a week—his total tax bill has been reduced from 74·3 per cent. to 38·5 per cent.
Thanks to the excellent work of the Select Committee on Social Services, which exposed the bogus definition of poverty, we know that the Prime Minister was not correct in her much-publicised comments that helping the wealthy gradually trickles down to the poor—she was trying to justify helping the wealthy. I recommend that Conservative Members read that report if they doubt what I am saying.
Opposition Members have never been in any doubt about the results of the Government's tax policies. Of course the rich have got richer and the poor poorer. Hon. Members only have to use their eyes to study the position in the regions. How can we make sense of policies that allow the highest paid director in 1989—William Brown of Walsham Brothers—to pay himself more than £2 million in salary a year, or policies that mean that a 19-year-old student on a Business and Technician Education Council course, studying for more than 21 hours a week, and living with her unemployed parents, should lose her only income once she reaches the age of 19? Her income was only £27 a week. I know of such a case. Her parents were receiving income support and child benefit until she reached the age

of 19, then every penny was withdrawn. Yet the same policies mean that she is expected to pay 20 per cent. of her poll tax.
I am glad that the hon. Member for Hertford and Stortford mentioned credit controls, he made quite a good case for them. If we are discussing the Government's record during the past decade, we should consider their record on debt. The National Consumer Council recently published a report that showed that on average consumers now owe twice as much as they did 10 years ago, and that the number of households that have difficulty in paying their debts has risen sharply. A staggering 2 million households have difficulty paying some sort of debt, and some half a million have multiple debts including mortgages and rents. That speaks volumes about a party that claims that home ownership is such a success story. I do not think that the right hon. Member for Mole Valley (Mr. Baker) can mirage that issue away.
The hon. Member for Hertford and Stortford based his assumptions about Labour policies on that doubtful document by two Americans, yet there has not been a success story in America for the vast majority of the people. Under Reagan, the tax burden was shifted from the rich to the poor. A study by the Urban Institute, whose members include prominent Republicans as well as Democrats, showed that, between 1980 and 1984, the poorest 20 per cent. of the population suffered a 7·6 per cent. decrease in disposable income, the next 20 per cent. up the scale suffered a decrease of 1·7 per cent. and the 20 per cent. at the top of the scale increased their income by 8·7 per cent. It is worth mentioning what has happened in America because much of what the hon. Member for Hertford and Stortford said was based on the Credit Suisse /First Boston report.

Mr. Hanley: If the hon. Lady is denying what my hon. Friend the Member for Hertford and Stortford and I said, which we believe to be the fruits of research into what the Labour party has told us about its policies so far, will she tell us what Labour's income tax policies are? We are waiting to hear if our research has been proved wrong.

Mrs. Mahon: If the hon. Gentleman is patient, he might hear something that will do him some good.
In America, similar policies of reducing taxes to reward the rich led to problems similar to those in the United Kingdom. Nobody denies that the Americans invested the millions that they received from tax cuts, as did the wealthy in Britain, but in neither case did they invest in wealth-producing assets. They went for short, speculative gains, which have not done either country any good.
The trickle-down approach in America failed just as spectacularly as it did in this country. We all remember President Bush's election pledge:
Watch my lips—no new taxes.
He is now faced with a projected federal deficit of more than $150 billion. He has recently signalled that he intends to preside over a budget reduction package that will include taxes, despite all that we heard during the run-up to the election—unless he again gets away with watering down the Gramm-Rudman Act, which would enable him legally to introduce an even larger budget.
The hon. Members for Hertford and Stortford and for Richmond and Barnes (Mr. Hanley) should concentrate on the Government's taxation record before taking to task those trying to put forward a fair programme of taxation. We believe in taxation because we believe in the


redistribution of wealth. We certainly would not have introduced the poll tax. Hon. Members should deal with that issue, but they do not want to talk about it. They should think about the high interest rates that the Government are using as a one-club weapon to avoid tax increases. That has harmed economic activity. Manufacturing in my constituency is suffering because firms cannot afford to borrow with the cost of money being so high.
Conservative Members should concentrate on the skills shortage and the crisis in education. They should concentrate their minds also on the explosion of poverty. They may be proud of their tax policies, but the poor and those on low incomes are not happy with Tory tax policies. The Labour party is proud of its policy review and its aims. I am sure that we will have magnificent achievements. My right hon. and hon. Friends will propose policies that will be properly costed, and the electorate will believe them.

The Financial Secretary to the Treasury (Mr. Peter Lilley): I congratulate my hon. Friend the Member for Hertford and Stortford (Mr. Wells) on securing this debate, on his excellent motion, and on the superb speech with which he introduced it and with which he demolished the Labour party's tax programme. The debate has been embellished by contributions from my hon. Friends the Members, for Richmond and Barnes (Mr. Hanley) and for Eastbourne (Mr. Gow). Their speeches, together with that of my hon. Friend the Member for Hertford and Stortford, will merit reading and re-reading throughout the country.
It was a generous idea to give the Opposition the opportunity to explain their policies. They have had that opportunity, but so far they have refused to take it. Labour Members have not once explained their party's tax policies. It is manifest that they are ashamed of them. They have exercised their right of silence for fear of incriminating themselves, and we well understand why. We shall have to wait to hear whether the hon. Member for Newcastle upon Tyne, East (Mr. Brown) will continue that policy. It is noteworthy that he is saving his speech until the end of the debate so that there will be no opportunity to comment on it.
The Government have always made clear the principles on which our tax policy is based. Our record of implementation demonstrates them in action and we have set clear targets for the future. Our principles are to reform taxes so that they are simpler; to remove unwarranted reliefs; to plug loopholes; to broaden the tax base; and ultimately to reduce marginal rates because they affect economic activity. Our record demonstrates a successful reform of the taxation of companies, of personal income, of capital, of inheritance, of husbands and wives and of savings. We have abolished seven major taxes and several minor ones. Our targets are progressively to reduce the burden of public spending and thereby tax as a share of national income, and to reduce the all-important basic rate of income tax to 20p as and when it is prudent to do so.
The Labour party is under an even greater obligation than we are to spell out its tax policies because they will impose an increased burden. People have the right to know how much extra tax they will have to pay, who will pay it,

which taxes will be raised and what new taxes will be introduced. That obligation is recognised by many Opposition Members who have been distinctly unhappy with the evasiveness of their Front-Bench spokesmen during recent months. The hon. Member for Kingston upon Hull, East (Mr. Prescott) made it an issue in the deputy leadership election little more than a year ago. He said:
We must learn the lesson from the last election when our tax policy was a mess. It is not credible for Labour to suggest our policies can be financed on a programme of low taxation. It can't and the electorate know it can't. We need to argue our case not duck the issues.
We shall learn later whether the Front-Bench spokesman argues the case or ducks the issue. I fear that the Opposition will continue to take as their motto, "Mum's the word." Indeed, they became quite angry on Second Reading of the Finance Bill when I suggested that those in the press who criticise Treasury Ministers for going into pre-Budget purdah might direct their fire at the Labour party for going into post-Budget purdah. However, they seem determined to remain there, at least until the next election.
Because the Opposition are not very forthcoming, we have the right to reconstruct, from the evidence available, the tax policies that it appears they will introduce. We can draw on three sources of evidence—first, their policy statements made before they went into pre-election purdah; secondly, their voting records on tax changes over the last decade; and, thirdly, their record when in government. Those sources combine to paint a clear picture of a party committed to high spending, requiring high taxation that will mean most people on average incomes and above paying more, and that will impose significantly higher marginal tax rates on a substantial minority.
Let us consider some of the Opposition's specific proposals and we must make no bones about this—for tax changes. They include the upper earnings limit, investment income surcharge, the higher rate of income tax and the basic rate of income tax. The first proposal is to abolish the upper earnings limit on national insurance contributions and impose a 9 per cent. tax surcharge on 3 million people on all incomes above £18,000 a year. In his article in the Independent on Sunday,—which I commend to my hon. Friends—the right hon. and learned Member for Monklands, East (Mr. Smith) was frank about that. He said:
They say 'you are going to hit people earning about £18,000 by making them pay this extra amount'. I say 'Yes I am'.
There is no reason to doubt the right hon. and learned Gentleman's word. A party that has as a central revenue-raising item a surcharge on employers' national insurance contributions—the notorious tax on jobs that my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) had the privilege of abolishing—would have no compunction about abolishing the upper earnings limit.
The second proposal is the restoration of a special supplementary tax on savings—the investment income surcharge that was also abolished by my right hon. and learned Friend the Member for Surrey, East. There is some doubt whether the plan is to restore a 15 per cent. surcharge, as previously existed, or to impose a 9 per cent. charge on all savings income—the hon. Member for Newcastle upon Tyne, East is nodding—mirroring


national insurance contributions. The Opposition voted against the abolition of the 15 per cent. surcharge, but it appears that a 9 per cent. tax on all 20 million savers who pay tax is now in vogue. Either way, it will be a tax on savings when we need more savings, not less.
It would bear most heavily on the elderly, retired, and those who would suffer most from the effect of Labour's inflationary policies in wiping out their lifetime savings.
As to the top rate of income tax, on a number of occasions, Labour's spokesmen have affirmed that it would be raised to a maximum of 50p in the pound—or 59p in the pound including the national insurance surcharge. In his revealing interview in the Independent on Sunday, the right hon. and learned Member for Monklands, East described that rather menacingly as
an exercise in moderation.
It is not clear why anyone should rely on Labour's promise not to raise tax rates if it came to power. I wonder whether the hon. Member for Halifax (Mrs. Mahon), who called for redistribution, believes that a top tax rate of 50p in the pound is high enough.

Mr. Tony Banks: Will the Minister give way?

Mr. Lilley: Of course I will give way—my hon. Friend the Member for Eastbourne (Mr. Gow) set an example.

Mr. Banks: It was a fine example to follow. I may say to the young Minister that it is all very well Conservative Members complaining about the Labour party not spelling out what it intends to do, but when my right hon. and learned Friend the shadow Chancellor does exactly that, Conservative Members will respond, "We do not believe what you say." We cannot win in that situation, can we?

Mr. Lilley: There is some suspicion, because Labour's voting record in Parliament indicates otherwise. Labour Members voted not only against the reduction of the top rate of income tax from 60p to 40p, but from 83p to 60p. Labour's record in government, too, belies the "exercise in moderation" to which the right hon. and learned Member for Monklands, East referred. When in government, Labour raised the top rate of tax from 75p to 83p, and the overall top rate was increased to 98p in the pound, on income from savings. Labour deliberately took that action, to "squeeze the rich until the pips squeak"—to use the inelegant words of the right hon. Member for Leeds, East (Mr. Healey).

Mr. Nicholas Brown: Is it the Financial Secretary's view that the entire process of Labour's policy review was just some kind of charade, for the purpose of presenting a pleasant face to the electorate, and that we do not mean a word of it? If that is the Minister's view, he should say so, rather than just imply that it is.

Mr. Lilley: There is an element of charade in Labour's policy review, and there is an important reason for some doubts lingering in the minds of not only my right hon. and hon. Friends but of people in the country at large, as to whether the conversion of the Labour party is sincere. The reason for those doubts is that Labour has never admitted that it was wrong. There is more joy in heaven over one sinner who repents than at 99 just men who need no repentance. Never has a Labour Member stood up and said, "We were wrong. We are sorry. We have changed, and we now have a different policy." Until Labour

disowns both its voting record and its record in government, doubts must remain about the policies that it presents.
I would expect any changed policy to be accompanied by a recognition that the previous policy was wrong. However, if Labour maintains a dual allegiance to its previous record and to its new, temporary policies concocted before a general election, it must expect the man in the street to hold some suspicions.
When Labour was in power, it deliberately raised top rates of tax, but not, it would seem, to acquire a great deal of extra revenue. The consequence of that action was that the top 5 per cent. of this country's richest people, who at the beginning of Labour's period of office paid 29 per cent. of our income tax revenues, paid only 24 per cent. of them by the end of Labour's term of office. That is scarcely in tune with the redistributive aims of at least the hon. Member for Halifax.

Mr. Frank Haynes: I do not know where the Minister got his brief, but he is wandering about all over the place. I wonder whether he holds constituency surgeries, as do I and my right hon. and hon. Friends. I held a surgery on Saturday, and people came in to complain about the taxes that they have to pay, even when they are in a very low income group. I could cry at some of the problems that they have as a consequence of the present Administration. The Minister keeps harping on about what Labour's policy will be if it gets into power. Don't worry, lad. Labour will get in next time. When it does, taxes will be based on people's ability to pay. That is what it is all about—so let the Minister put that in his pipe and smoke it.

Mr. Lilley: I am grateful for that constructive contribution from the hon. Gentleman, who has just wandered in.
The main issue affecting both the hon. Gentleman's constituents and mine is not the top rate of income tax, which falls directly upon no more than 1·7 million people, but the basic rate. Neither Labour's policy review nor the statements of Opposition figures give clear guidance. My hon. Friend the Member for Hertford and Stortford made clear, as did my hon. Friend the Member for Richmond and Barnes, the conflicting statements made by Opposition Members. If today's debate serves any purpose, it is to achieve clarification from Opposition Members as to whether it is Labour's intention to raise the basic rate of income tax.
The right hon. and learned Member for Monklands, East acknowledged in his recent interview that the tax reforms he proposes will not be "revenue-neutral." He was clear about that. The right hon. and learned Gentleman admits that the yield from implementing just one of them would be absorbed by just one of Labour's pledges. We have yet to see the Opposition spell out and cost all their pledges. They promised to do so in the foreword to the very document that the hon. Member for Newcastle upon Tyne, East suggested as a reliable guide. But the shadow Chief Secretary has said that she disowns the promise made by the Leader of the Opposition in his foreword to cost Labour's policies before the general election. Labour has now gone back on that promise and said that it will not cost them until afterwards. That is another reason why we have doubts about the reliability of Labour's spokesmen.
In the absence of clear statements by members of the Opposition Front Bench, and as they have not taken the opportunity today to stand up and say whether they will raise the basic rate, we must refer again to Labour's voting record and its record in government. The voting record of Labour Members is clear. They voted against every cut in the basic rate that we have introduced in this and previous Parliaments. They voted against a reduction from 33 per cent. to 30 per cent. in 1979; 30 per cent. to 29 per cent. in 1986; 29 per cent. to 27 per cent. in 1987; and 27 per cent. to 25 per cent. in 1988. On each occasion, the Opposition said that they would prefer to use potential revenues from income tax to increase public spending.
One can believe that, because one knows that that is where Opposition hearts lie. When in government, and after some ups and downs, Labour ended up with a basic tax rate 3p higher than that which applied when they were first elected. If we were simply to uprate in line with inflation the tax allowances that Labour left behind for a Conservative Government, and if we had maintained the same tax rates, the average man would be paying over £1,000 a year more income tax.
That underestimates the true burden of public expenditure under Labour. A large part of its programme was financed not by tax but by borrowing. Borrowing is nothing more than deferred taxation. The equivalent value today of the deferred tax burden that Labour was incurring, year in and year out, was equivalent to about £2,000 per household in the last year of that Labour Government.

Mr. Tony Banks: That is what one borrows money for.

Mr. Lilley: I am afraid that it is not as simple as the hon. Member for Newham, North-East suggests— [Interruption.] I meant to say Newham, North-West.

Mr. Banks: I hope that the Minister's economics are better than his geography.

Mr. Simon Coombs: Will my hon. Friend confirm that, such was the Labour Government's inability to control public expenditure, that in 1976, although they raised personal and corporate taxes significantly that year, they had begun the year by assuming that the public sector borrowing requirement would be £2·7 billion? As it turned out, by the end of the year the PSBR had reached £9 billion.

Mr. Lilley: My hon. Friend is absolutely right. It is difficult to forecast the public sector borrowing requirement, but happily we often make the mistake of underestimating our surpluses.
The overall impact of the Labour party's policies is clear: a higher burden of taxation, higher taxation of the average man in the street and, most of all, a substantial increase in marginal tax rates for large numbers of people. At last we know what supply side socialism means. It is the exact opposite of what the rest of the world did during the supply side revolution of the 1980s. During that period, countries from India to America, from Japan to the Ivory Coast, reduced their top rates of tax and their rates of tax generally because they believed that marginal rates of tax were important for efficiency, growth and the prosperity of the economy.

Mr. Battle: If the result of this week's meeting is that Congress and the President of the United States decide to do a U-turn and raise taxes to fund the trade and budget deficit, will the Government here do likewise?

Mr. Lilley: I am grateful to the hon. Gentleman for making that point; it reinforces what I said earlier. We had to raise the tax burden to deal with the deficit that we inherited from Labour. I do not intend to comment on the United States Government's predicament. If, however, the hon. Gentleman is suggesting that deficits cannot be sustained and have to be financed, there is a great deal of force in what he says.
The hon. Gentleman's colleagues do not seem to recognise the damage that can be done by high rates of tax, not just to individuals but to the health of the economy as a whole. The Labour party specifically denies that they cause damage. The hon. Member for Dunfermline, East (Mr. Brown) said:
I find that there is no respectable evidence … There is nothing at home or abroad that can justify the ideology of incentives"—[Official Report, 26 April 1988; Vol. 132, 231.]
That was said in the context of cutting the basic and the top rates of tax. The hon. Gentleman is happy to ignore the evidence of common sense and experience that has convinced the rest of the world that taxes must be reduced.
We are in competition with countries throughout the world that are endeavouring to reduce taxes. I do not believe that the electorate, both because of family budgets and their recognition of this country's needs, will vote for a party that is as committed as the Labour party clearly is to raising marginal tax rates and clobbering the British people, and therefore the British economy.

Mr. Nicholas Brown: Like the hon. Member for Eastbourne (Mr. Gow), I am grateful to the hon. Member for Hertford and Stortford (Mr. Wells) for tabling his motion. I am sorry that he feels that he has been cheated twice. He feels that he has been cheated by the Labour party's headquarters in Walworth road, which seems to have provided him with a different copy of the policy review from the one that the rest of us have. If that is the reason why he has been misled, I am sorry. I am also sorry that he may have been cheated by his own party's Whips Office.
We respect the hon. Gentleman's views on the Third world and overseas aid. Given his special interests and his luck in the ballot, I should have thought that he would choose a subject for debate that related to the Third world and overseas aid. This is a partisan motion. Nevertheless, it has provided me with an opportunity to respond to the matter of substance. I did not expect to have such an opportunity until after the next general election.
The motion has no ground in fact. It is the sort of contemptible motion that one associates with Liberal party councillors. It suggests that the Labour party is committed to
massive increases in public expenditure".
I do not know why the hon. Gentleman believes that public expenditure increases would be massive. Many Opposition Members believe that there ought to be substantial increases in public expenditure, but we are not committed to them, because we know that they cannot be achieved.
The motion states that the Labour party would impose
new taxes on savings, jobs and property".


We do not intend to invent new taxes to cover any of those matters. We shall no doubt adjust the present tax rates, but we do not intend to introduce new taxes.
The motion goes on to say that the Labour party would increase the rates of income tax. That is a fair point; I shall have more to say about it later. However, the Labour party's policies will be directed at those who pay the top rates of income tax. Those who pay income tax at the standard rate have nothing to fear from our policies.
The motion goes on to state that the Labour party would increase national insurance. That is a bit rich, coming from the party that in 1979 suggested that it would do exactly the opposite and then increased the rate from 6·5 to 9 per cent. If we increased national insurance, it would be only a question of removing the ceiling. We do not suggest any further increase in national insurance charges. the policy review document suggests nothing of the sort.
The motion also says that the Labour party is refusing to reveal its plans for the basic rate of income tax and contrasts that with the Government's goal of basic rate of just 20p. When we set goals we are told that they are vague promises, that we should be unable to achieve them and that we are not to be believed. When the Government set goals and do not achieve them—some Conservative Back Benchers have said that they ought not to be achieved at the moment—that is laudable. Why are our goals derided as dishonest while the Government's goals are praised? It is unusual for the hon. Member for Hertford and Stortford to be so partisan.
The motion goes on to say that Labour
will be forced substantially to increase the burden of tax on many lower and middle income earners.
We shall do nothing of the sort. Our taxation policies are designed to increase the wealth of the low-paid, not to diminish it. It is a bit rich for the Conservative party to say that, when only last Thursday it was condemned by the Social Services Committee, an all-party Committee, for having produced misleading statistics relating to those on low incomes. In its report the Select Committee said:
It is now clear that those on lowest incomes gained least in the period 1981–85. We await with interest the publication of the new tables on Households Below Average Income to see whether this trend continued to 1987.
The blame lies with the Conservative Government. It is wrong for them to try to palm that off on us.
The motion
notes that Labour plans run counter to the growing international consensus on the case for low taxes.
That is wrong. Our taxation policy is more in harmony with what is happening in Europe and among the developed countries of the world than the narrow and restrictive tax policies, with only two bands, that are being pursued by the Government. Only one person in 25 pays the top rate of income tax. For everyone else, regardless of their earnings up to the top rate threshold, there is only one rate of tax. That is not what happens in the rest of Europe and that is not what we propose. If criticism is to be directed at anyone, it ought to be directed at the hon. Gentleman's own party, not at the Labour party.
The motion also states that
new taxes would stifle enterprise, drive firms and individuals abroad"—
although we are trying to do exactly the opposite—
and gravely weaken the wealth-creating capacity of the United Kingdom".
When one examines the recently published investment and growth figures, one realises that the Government ought

not to direct such a charge at us. The motion also states that the Labour party would create unemployment. Our goal is exactly the opposite.
I intend to set out the Labour party's taxation policies and to deal with the matters of substance that have been referred to in the debate. Our taxation policies are set within the context of our overall economic and social programme. It would be bizarre if they were not. In the overall management of the economy, our objective is to achieve steady and balanced growth, to control inflation, to restore a reasonable equilibrium in the balance of payments and at the same time to sustain the highest possible levels of employment. Our taxation policies are designed to serve those ends. As well as being compatible with those overall economic objectives, our taxation policy is also compatible with the Labour party's social objectives. Our overriding social objective is fairness; by that we mean the redistribution of the tax burden from those least able to bear it to those most able to.
So it was fair of the hon. Member for Hertford and Stortford to say that some taxes will go up: so they will. For others, they will go down. The Labour party does not intend to divorce its taxation policy from its public spending programme, nor do we intend to undermine the role that taxation, direct and indirect, plays in the overall management of the British economy. Taxation will play its part in the achievement of the Labour party's overall economic objectives.
Before going on to give Conservative Back Benchers the details that they claim to crave, it would be helpful if I reiterated the statement on public spending made by my hon. Friend the Member for Derby, South (Mrs. Beckett) in the debate on public expenditure on 13 February:
First, the Opposition reject the simplistic view that there is always, and in every circumstance, merit in reducing public spending as a percentage of national income … We are determined to make only the most limited of firm spending commitments—those that we must and can afford. Beyond that, we shall set out the direction of public investment and the priorities and choices of a Labour Government, emphasising throughout that we will not spend more than the country is earning or can prudently afford … Our priorities are clear: immediate relief for those who have suffered most —the pensioners and families with children—and the fostering of much-needed investment in our future".— [Official Report, 13 February 1990; Vol. 167, c. 178.]
Conservative Back Benchers ask what this is going to cost. In a special focus on meeting the challenge— Labour's economic policy—Goldman Sachs produced an analysis as follows:
Thus the Labour Party has already committed itself to spending at least an additional £3·3 billion on improved pensions and child benefit in its first year of office.
I would not quarrel with those figures, which show the commitment implied in the two spending priorities.

Mr. Gow: I think I heard the hon. Gentleman say that a future Labour Government would not spend more than the country was earning. May we take it from that that it would not be the policy of a future Labour Government to have a public sector borrowing requirement?

Mr. Brown: The hon. Gentleman implies that we should not borrow to pay for revenue expenditure. If, on the other hand, he suggests that we should not borrow for much-needed investment in the economy, with a clear return over time, I cannot give him the assurance that he seeks. If he is saying that we should not borrow to meet


revenue commitments, he is following what I am saying most realistically. I hope that that is a good enough answer for him.
What I have said does not mean that the Labour party has no other spending priorities; Conservative Members have pointed out some of them. Of course we have—they are set out in our policy review documents and in statements by the relevant Opposition Front-Bench spokesmen for the shadow spending Ministries; but, as the hon. Member for Eastbourne (Mr. Gow) pointed out, the real issue is how far an Opposition can go when making detailed public spending decisions and detailed decisions on taxation rates given that the economic circumstances that we shall have to face are not those that prevail now but will be those that prevail at the time of the next election.
The Labour party has set out its public spending priorities, beyond the two firm and clear commitments that my hon. Friend the Member for Derby, South has given. Those priorities will take their place in the public spending round after the next Labour Government come to power. As long as our commitments are carefully costed and tightly controlled, there does not seem much point in conducting a hypothetical shadow public spending round at this stage. Our objectives are clearly stated and our timetable depends on the overall strength of the economy that we shall inherit from this Government after the next election.
If Conservative Members are reluctant to acquiesce in this approach, I have searched the archives to find information that will help me to convince them. I looked for an authority whom Conservative Back Benchers might respect, and failed, but I found some quotations from speeches made by the shadow Chancellor in 1979, before the last election. The right hon. and learned Member for Surrey, East (Sir G. Howe), now deputy Prime Minister, made a number of specific commitments on behalf of the Conservative Opposition at that time, and I am sure that it would interest the whole House if I reviewed them. After all, this debate is about the taxation policies of the Opposition, and it seems unnaturally restrictive to concentrate on the policies of the present Opposition—we ought to have a look at what the Conservatives were saying when they were in our position. They have no right to complain about that, because they are always harking back to the era of the previous Labour Government when they attack us. So we should review what the then shadow Chancellor said, if only as an awful warning to us all.
In his speech at Oxford on 7 April 1979, the then shadow Chancellor said:
Every Labour Government puts taxes up … every Conservative Government gets taxes down. The next Conservative Government will be equally true to our record.
Of course, that was not true. Taxation as a share of gross domestic product has risen substantially under this Government. They inherited a rate of about 34 per cent.; since 1981 the gross tax take from the economy has been between 38 and 39 per cent.
Again in April of 1979, refuting charges made by the then Labour Government, the shadow Chancellor condemned what he called Labour's dishonesty. He said that there were
a number of inexcusable errors in Labour's televised party election broadcast on Friday, which I would like to correct.

He went on to say that the Conservatives had
absolutely no intention of doubling VAT.
Granted, he held out for just over a year, but that was not quite the same as disclaiming any intention. I suppose that the lawyers might have got him out of that, but I doubt whether the electorate would have.
The shadow Chancellor also said:
We do not claim to be able to work a miracle cure to solve all the problems of the economy … We want to raise living standards without stoking inflation.
That brings to mind the later objective of zero inflation, to which the Government of course said that they were committed. They did not add that they were going to put a 1 in front of the zero for the foreseeable future.
At his press conference on 18 April 1979 the shadow Chancellor said:
The next Conservative Government will cut, and cut substantially, the basic and higher rates of income tax. We shall raise, and raise substantially, the level at which people start paying income tax.
It took nine years for him to honour that pledge to higher rate taxpayers; for lower rate taxpayers no mention was made of the 2·5 per cent. national insurance increase, which came much earlier than the tax cuts.
By 1982–83, the total tax burden had risen, not fallen. In Pentlands, the right hon. and learned Gentleman said:
Creating secure jobs: the Conservative way … it's high time for a fresh approach, in Scotland as well as in the rest of the United Kingdom. The next Conservative Government will give Scotland that new approach. We must make sure the next five years are not as bad as the last.
The electorate in Scotland have delivered their own verdict on that.
Dealing with the pace of change and the pace at which commitments would be honoured, in an article in The Times of 13 August 1978, the shadow Chancellor said:
I am very anxious to avoid the impression of the instant arrival with the instant decision and the instant solution. I know where I want to go and I am determined that we should go there at a steady pace.
The House will recognise that as authentic stuff. He continued:
Of course we should want to alter the whole climate as soon as possible, not least because the benefits will be some time a-coming. That is why we are talking about three to four years.
When Labour hon. Members talk about the pace, Conservative hon. Members say that that is not allowable; however, they made precisely the same points when they were in opposition.
My right hon. and hon. Friends will no doubt ask, "Where did that policy all end? Where did the former shadow Chancellor's pledges get him?" By December 1980, Ian Aitken was writing under the headline
Sir Geoffrey complains of being hampered by election pledges.
That report—in The Guardian in December 1980—said:
The Chancellor of the Exchequer claimed last night that his mini-Budget was the direct result of pledges and commitments made by the Conservative party before and after the general election. He told sceptical Tory backben-chers that he now found himself, surrounded by road blocks created by these undertakings … he is understood to have told the private meeting that the Government was now `pushed out against the frontiers of our pledges'.
It all ended in tears. By 1983, the financial section in The Guardian was saying in a leader article:
how the Tories failed to keep their tax promises".
The article pointed out that wealth had not been redistributed in the way in which the Conservatives had said that they intended. That is an awful warning to those


who make promises before general elections and cannot keep them afterwards. The Labour party has been careful about its detailed pledges—careful to ensure that it does not make any more promises than it can sustain. It is setting out a broader programme, which we hope to achieve if circumstances allow. It is right for us to do that.
The article in The Independent on Labour tax policies, to which reference has been made, sets out a number of charges under the headline
Labour's half-baked conversion on tax".
The headline bears no relationship to the content of the article. One charge is that
The threshold for high-rate tax will no longer be raised in line with inflation, so that in real terms the starting point for higher tax will be lowered.
That is what the Government did in the previous Budget, and it is precisely what we have not said that we will do. In fact, we have not said where the tax bands will be placed.
We have set out our parameters carefully. We have said that the top rate of tax will be 50 per cent. It is right for Conservative Members to say that we have pledged to eliminate the national insurance threshold for people earning more than £30,000—or whatever the national insurance ceiling is. That will mean that some people are paying more. That change will take some people up to 59 per cent. That is the top rate of taxation that endured for the entirety of the chancellorship of the deputy leader of the Conservative party, and for most of the chancellorship of the right hon. Member for Blaby (Mr. Lawson). If is is such an iniquity to return to a rate that is only slightly less than that which endured for all that time, why did the Conservative party not rise up and insist that for most of the 1980s such a rate was reduced rather than sustained?
The hon. Member for Hertford and Stortford had a chance to move a motion on economic affairs. It is a poor and desperate attack that does not tell us anything, except about the people who launched it. Why do Conservative Members find it necessary to attack the Labour party for something that it is not going to do? After 10 years of Conservative government, why do they not try to show the party's economic achievements? Why do they not table a motion about the inflation rate, at 10 per cent.; about the growth rate forecast by the Government, at 1 per cent., which will put us bottom of the growth league; about the Government's forecast for negative growth in investment in the 1990s; about interest rates, praising the Government for the highest interest rates in Europe; about another Government record—the record trade deficit, which was £21 billion last year and last month the second highest ever, at £2·2 billion; about unemployment, which is now signposted for an upturn; about social justice, which is something not to be found in the Conservative party's tax policies; and, to top it all, why do we not have a motion about the electoral success of the poll tax and its widespread popularity?
Those are the real issues that are involved in the management of the economy. The Conservatives dare not have a debate in their own time about any of them, so they must attack us. They cannot even attack us fairly; they must do so unfairly, and on spurious grounds.

Mr. Anthony Coombs: I thank my hon. Friend the Member for Hertford and Stortford (Mr. Wells) for giving us this opportunity to examine the vague

and vacuous taxation policies of Her Majesty's Opposition. My hon. Friend quoted Lewis Carroll, and I shall quote Edmund Burke, who said:
It is a general popular error to imagine the loudest complainers for the public to be the most anxious for its welfare.
It is interesting to note that members of the Labour party dress up their taxation policy in terms of social justice and fairness. High-tax high-spending policies have had precisely the opposite effect. Most people would agree that high-tax, high-spending policies reduce incentives, enterprise and growth, and therefore reduce the chance of jobs in many constituencies. They prevent growth, and therefore the additional finance that the Government have made available for public services. Most important of all, those policies damage the interests of the people in the lower-paid groups whom the Labour party purports to represent.
Not only did the previous Labour Government increase tax rates to 83 per cent.—and 98 per cent. for investment income—for the wealthiest in society, but, because they did not uprate tax allowances in line with the inflation that they had created, 1·8 million more lower-paid people were paying tax when they left office than when they came into office. If we compare that with the Conservative Government's record, we find that 1·2 million lower-paid people are now not paying tax who were paying it under the previous Labour Government.
When we examine the Labour party's proposed tax policies, we must bear two things in mind. First, in the three years between 1974 and 1977, the Labour Government increased the amount of tax payable by an average household with an average income from £389 a year to £876 a year. Secondly, if we compare the share of income tax paid by the top 5 per cent. of earners in 1976 —when the Labour Government were in power, with their high-tax and high-spending policies—with 1989, with the Conservative party's low-taxation policies, we find that that top 5 per cent. have increased their proportion of total tax from 25 to 29 per cent. The top 10 per cent. of earners now pay 40 per cent. as opposed to 35 per cent. of the total tax take, whereas the lowest 50 per cent. of wage earners pay only 16 per cent. of the total tax take. That is hardly unfair.
Let us extend that argument to the amount of wealth held by various proportions of the population. In 1971, again under a high-tax regime—just after the Labour government of 1966–70 has left office—the top 1 per cent. of wealth owners, including pensioners, had 21 per cent. of the total wealth. By 1987, the figure had dropped to only 11 per cent. The top 5 per cent. earned 37 per cent. in 1971 and now earn only 24 per cent. The top 10 per cent. earned 49 per cent. in 1971 and now earn 35 per cent.
Because a low-taxation, high-incentive society gives more people more opportunities to climb the ladder and create wealth, it creates a more even distribution of wealth. That is why a high-incentive——

It being Seven o'clock, proceedings on the motion lapsed, pursuant to Standing Order No. 13 (Arrangement of public business).

7 pm

Mr. Max Madden: On a point of order, Mr. Deputy Speaker. I wish to raise a point of order, notice of which I gave to the Chair earlier this evening and to the Home Office an hour or more ago. I


understand that immigration officers and police officers are at this moment searching for 33 young Chinese people, including a girl who is eight and a half months pregnant, who arrived in the United Kingdom 10 days ago. I understand that they were in possession of visas to enter Canada and, for reasons which are not known, the airline refused to take them to Canada, and they were left in Britain.

Mr. Deputy Speaker (Mr. Harold Walker): Order. What is the point of order for me?

Mr. Madden: My point of order is that the British Government professed their outrage at the massacre in Tiananmen square last June. These young people fled China because of that massacre and are now being——

Mr. Deputy Speaker: Order. What is the point of order?

Mr. Madden: They are now threatened with deportation from Britain to Panama, which I do not think is well known as a place of haven and stability. My point of order is that I would urge that no action be taken to arrest, detain or deport these young people until we have——

Mr. Deputy Speaker: Order. I understand the hon. Member's concern, but, that has nothing to do with my responsibilities to the House and the Chair.

Mr. Madden: Indeed, Mr. Deputy Speaker. I should like a statement from the Home Secretary to the House later tonight——

Mr. Deputy Speaker: Order. It has taken the hon. Member a long time to get to that matter. I have not received a request for a statement to be made. No doubt the hon. Member's comments will have been heard by those on the Treasury Bench.

Mr. Madden: When I contacted the Home Office earlier tonight, I asked for a Home Office Minister to be present when I raised my point of order at 7 o'clock. I was assured that efforts would be made to have such a Minister present——

Mr. Deputy Speaker: Order. The hon. Member must recognise that these are not matters for me. I have no responsibility for them.

Clyde Port Authority Bill

Order for Second Reading read.

Dr. Norman A. Godman: On a point of order, Mr. Deputy Speaker. I seek your guidance on a serious matter concerning the Bill. In respect of my constituency, clause 4(3) and (4) of the Bill are, at best, incompetent and, as worst, ultra vires.
The Clyde port authority, despite its claims, does not own any property on the Greenock waterfront. On 6 July 1772, in Edinburgh, Sir John Shaw Stewart gave the people of Greenock by way of a feu contract the whole of the waterfront between the Kirk burn, Westburn street and the Royal close, Bogle street. The port and harbours were given in trust in perpetuity to the magistrates, treasurer, town council of Greenock and their successors. That generous decision was incorporated in section 26 of the Greenock Port and Harbours Act 1867 and further codified in section 212 of the Greenock Port and Harbours Consolidated Act 1913, which states:
Nothing herein contained shall hurt or prejudice the charter granted to the town of Greenock in the year one thousand seven hundred and fifty-one by the deceased Sir John Shaw of Greenock Baronet nor the feu contract betwixt John Shaw Stewart Esquire and the magistrates and council of Greenock dated in the year one thousand seven hundred and seventy-two or any rights privileges or dues thereby conferred or thence arising so far as consistent with the provisions of this Act.
Given the CPA's commercial banditry in this matter, I urgently request that the Bill be refused a Second Reading, for the reasons that I have outlined.

Mr. Deputy Speaker: I am grateful to the hon. Member for having given me notice of his intention to raise these matters. I have had them looked into carefully, and there is nothing out of order about the Bill being down for Second Reading. Any aspects of the Bill that call into question its competence or details in the clause are matters for the Committee to discuss and decide in its examination of the Bill, should it be given a Second Reading by the House. Of course, there is nothing to stop the hon. Member, should he be fortunate in catching my eye, to refer to these matters again during the debate.

Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker. There is a growing custom, which is very unsatisfactory in terms of parliamentary procedure, whereby Ministers make important statements by references in written answers.
The hon. Member for Luton, South (Mr. Bright) received a reply from the Ministry of Defence referring to a report in the Library about the case of Colin Wallace and misinformation. If Governments put substantial, far-reaching statements in the Library, they should offer to give the information, if not in answer to a private notice question arranged through the usual channels, at least by a parliamentary statement. May I ask whether you have had any request Mr. Deputy Speaker, from any Defence Ministers to make an oral report to Parliament on an extremely significant report about Government misdeeds?

Mr. Deputy Speaker: I am not aware of any request from any Minister to make a statement to the House on this or any other matter.
On the hon. Member's general point, Mr. Speaker has found it necessary in the past to make some critical comments, and no doubt he will read the hon. Member's points with interest.

Mr. Tony Worthington: On a point of order, Mr. Deputy Speaker. My point concerns the way in which the procedures of the House are used. The Bill is clearly a Government measure. The device of private Bill time has been used to consider a Government measure. If this were a Government measure, we would have been able to get much better information and much better explanations about the Bill's purpose than is possible with a private Bill. I wonder whether it is causing you some torment to have the procedures of the House and your stewardship of private Bills abused by the Government.

Mr. Frank Haynes: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Is it on the same point?

Mr. Haynes: I said, further to that point of order.

Mr. Deputy Speaker: Mr. Frank Haynes, then.

Mr. Haynes: Okay, now we are right.
I watched your face, Mr. Deputy Speaker, when the point of order was made about the Bill: If you had been on the Back Benches, as you were in the past, you would have been playing hell.

Mr. Richard Holt: Withdraw.

Mr. Deputy Speaker: Order.

Mr. Haynes: The hon. Member for Langbaurgh (Mr. Holt) is not in the Chair; you are. I am saying that, had you been on the Back Benches, you would have been making some representations somewhere. A representation has been made, no progress has been made, so the matter has rightly and properly been raised here. Now you find yourself in the Chair, so I suggest that you have some responsibility, bearing in mind what you would have done on the Back Benches, as you did many years ago.

Mr. Holt: That is out of order.

Mr. Haynes: You twit.

Mr. Deputy Speaker: Order. The hon. Member for Ashfield (Mr Haynes) must not use such language when I am on my feet—or even when I am sitting down. The hon. Member cannot remember when I was a Back Bencher —I can hardly remember it. I hope, given what recollection I have, that no right hon. or hon. Member would take my behaviour as a Back Bencher as a role model for him to follow.
The hon. Member will know, as does the House, that private Bills are carefully examined by the examiners before they are put before the House. The examiners must be satisfied that the Bills are correct in all respects for presentation in the House. That has been done in this case, as in every other.
A similar point was raised fairly recently when we had before us a similar Bill—the Tees and Hartlepool Port Authority Bill—and it was dealt with by the occupant of the Chair. I doubt whether I can add anything useful to what was said on that occasion.

Dr. Godman: On a point of order, Mr. Deputy Speaker. Let me ask you a technical question. Given that no petitions of objection have been laid against the Bill, am I right in supposing, that if it is successful, it will go from this place to the Committee on Unopposed Bills? Am I also right in thinking that that Committee cannot consider amendments to the Bill?

Mr. Deputy Speaker: The hon. Gentleman is right that, in the absence of petitions, the Bill will go to the Committee on Unopposed Bills, but I think that in that Committee, appropriate amendments that satisfy the rules of order can be tabled, discussed and made. These matters may fall within the scope of what the Chairman of the Committee will permit, and the Committee could, if necessary, refer to the points that the hon. Gentleman has made this evening.

Mr. Haynes: Further to the point of order, Mr. Deputy Speaker. I listened to what you said a little earlier. You did not really listen to what my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) said.

Mr. Holt: Oh!

Mr. Haynes: I wish you would do something about him, Mr. Deputy Speaker.
The Bill should be Government business. That is what we are saying. You know that yourself, Sir, without our having to tell you. Government business follows our consideration of this private Bill. That is how the Government are keeping the payroll vote here. That is what is going on.
Can I pick you up on a point that you made earlier, Mr. Deputy Speaker? I remember you coming to this place. I followed your election in Doncaster and I know exactly who you kicked out. You can laugh, but I remember it well and I shall not forget it.

Mr. Deputy Speaker: I do not think that I can usefully add to what I have already said.

Mr. Allan Stewart: I beg to move, That the Bill be now read a Second time.
The Clyde has played a key role in the economic and social history of Scotland and the United Kingdom. It is celebrated in legend and song—although it may be doubted whether Sir Harry Lauder, when he sang:
Roamin' in the gloamin'
By the bonnie banks o' Clyde
Roamin' in the gloamin'
Wi' my lassie by my side",
had in mind those parts of the bonnie banks owned by the Clyde port authority.
The Bill is about the future, and it will allow the authority to play a full and constructive role in that future. Before I discuss the merits of the case, I shall explain the background——

Mr. George Foulkes: Before the hon. Gentleman turns to the merits of the case, I have a question to ask him. He may be interested to know that I travelled through Eastwood this morning, and I looked carefully to see where his constituency touched the Clyde. I could not find any part of Eastwood that touched the Clyde. Now or at some point, will the hon. Gentleman explain to the House his interest in the Bill—indeed, all his interest in the Bill? The


House will be interested to know what they are, as the hon. Gentleman certainly cannot be said to have a constituency interest.

Mr. Stewart: As I understand it, the Clyde port authority area does not touch the hon. Gentleman's constituency either.

Mr. Foulkes: Oh, yes it does.

Mr. Stewart: In any case, I assure the hon. Gentleman that a substantial number of my constituents work for the Clyde port authority.
I was about to start by explaining the general background to the Bill. As the hon. Member for Greenock and Port Glasgow (Dr. Godman) pointed out in his learned point of order, no petitions have been lodged against the Bill. The existence of the Bill has been well known for some time and no riparian authority has petitioned against it. The Bill has been fully considered by the local authorities concerned.

Mr. Holt: Does my hon. Friend agree that, as the local authorities petitioned against the Tees and Hartlepool Port Authority Bill, and the fact that the Labour-controlled authorities in Scotland have not petitioned against the present Bill means that they support it?

Mr. Stewart: I hesitate to go quite as far as my hon. Friend, but no authority has petitioned against the Bill —nor has any other body.

Dr. Godman: I am extremely grateful to the hon. Gentleman, especially given the compliments that he has just paid me. Can he confirm, on the basis of his wide procedural knowledge, that although no petitions of objection have been laid in this place, there will be an opportunity for petitions of objection to be laid in another place within the 10 days after the Bill receives its Third Reading?

Mr. Stewart: I hesitate to give procedural guidance to the hon. Gentleman, as I can claim no expertise in the matter. My own—perhaps erroneous—understanding is that the hon. Gentleman is perfectly correct.
I emphasise the fact that the decision to pursue the private Bill route was made unanimously by the board of the Clyde port authority. That distinguished board includes a Labour politician who is extremely well known in the west of Scotland—the chairman of Strathclyde regional council's economic and industrial development committee, Mr. McGarry—and Mr. Tom O'Connor of the Transport and General Workers Union. Moreover, the Transport and General Workers Union has adopted different positions in respect of the Scottish and the English ports. The union has decided to take no action on moves by the Scottish ports towards public limited company status.
The Clyde Port Authority Order 1965 prevents the authority from competing on equal terms with continental ports or with ports in the United Kingdom. The general shift in traffic from west to east coast in recent years has made it necessary for ports on the west coast of Britain to consider means of diversification to reduce the vulnerability of the existing port businesses. The existing powers of the authority, contained in the 1965 order, are restrictive

and may be changed only by legislation. The authority has long been mindful of the restrictions imposed on its powers and has sought to operate within those limits.

Mr. Worthington: Can the hon. Gentleman give examples from recent years to show how the powers have been restrictive? When has the authority wanted to do things that it has not been permitted to do?

Mr. Stewart: I was just about to expand on that point, and I hope that the hon. Gentleman will be reassured when I reach the end of my explanation.
The view taken by the board of the authority—I suggest correctly—has meant that the authority has not been able to take up investment opportunities that have come its way, given that its powers to invest are limited by paragraph 64 of the 1965 order to port-related businesses. Similarly, the authority is prohibited from acquiring property other than for port purposes and from developing its property, except with a view to its ultimate disposal. As Opposition Members know, the authority is a substantial riparian landowner. As such, and consistent with its role as the port of Clyde authority it is naturally anxious to participate fully and assist in the regeneration of the river and the river bank. Its limited powers of investment and property development mean that it has considerable difficulty entering into joint venture agreements or investing in joint venture companies to handle development of riverside sites.

Mr. Worthington: I want to modify my earlier question. How would this Bill alter the authority's ability to develop the land that the authority owns at present?

Mr. Stewart: I was about to reach that point.
The need for ultimate disposal means that the authority has no effective means of securing control, or even influence, over any development. An inability to purchase land other than for——

Mr. Worthington: Will the hon. Gentleman give way?

Mr. Stewart: No. I have already given way to the hon. Gentleman several times.

Mr. Worthington: The hon. Gentleman has not answered my question.

Mr. Stewart: If the hon. Gentleman will give me a minute, I will endeavour to answer his question.
An inability to purchase land other than for purposes directly related to the port business, makes site assembly and efficient use of the authority's existing land resources in relation to the regeneration of the river well-nigh impossible.

Mr. Worthington: Will the hon. Gentleman give way?

Mr. Stewart: I have already given way several times to the hon. Gentleman. However, I will give way to him once more because I am aware of his interest in these matters.

Mr. Worthington: I am extremely grateful to the hon. Gentleman.
With regard to whether the Clyde port authority must eventually dispose of land, I should be grateful if the hon. Gentleman could draw my attention to the part of the legislation which sets that out. I know that the port authority can enter into, and I believe has entered into, substantial leasing arrangements with private companies;


they do not involve the disposal of land. I am at a loss to understand from what part of the legislation the hon. Gentleman has derived his information.

Mr. Stewart: I have referred to the advice provided to the authority by its lawyers. The legal advice is that, because of the existing provisions, the authority is inhibited in the ways that I have described.

Mr. Brian Wilson: My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) has raised an important point. As I understand it, the case being made by the hon. Member for Eastwood (Mr. Stewart) rests on the proposition that the powers of the Clyde port authority, in its present form, are so severely restricted that it is necessary for it to be metamorphosed into something else. The hon. Member for Eastwood is presenting the Bill and my hon. Friend the Member for Clydebank and Milngavie asked him very reasonably what the authority cannot do now that it could do if the Bill was approved. The hon. Member for Eastwood could tell us only that the lawyers have advised the authority. The authority presumably advised the hon. Gentleman and the hon. Gentleman is now advising the House. Fourth-hand rumour rather than statement of fact in this House is unacceptable.

Mr. Stewart: If that is the case, it is extremely surprising that the Clyde port authority board which included Mr. Lawrence McGarry felt it necessary to introduce this Bill. It has been the board's view for a considerable time that its advice is that the present powers are restrictive and are particularly restrictive in relation to its desire to enter into joint ventures and take a full part in the urban regeneration of the Clyde.

Mrs. Maria Fyfe: On a point of order, Mr. Deputy Speaker. I am sure that I am not the only person who is becoming perturbed at what the hon. Member for Eastwood (Mr. Stewart) is saying. Even if the lawyers are mistaken and the restrictions are not as they have been described to the hon. Member for Eastwood, the House will waste a great deal of time unnecessarily. Surely it is not good enough to discover whether the lawyers' advice was correct in the Committee. The House is entitled to know now what specific parts of the legislation are——

Mr. Deputy Speaker: Order. That is not a matter for me. I made it clear in response to earlier points of order that the Bill has been scrutinised by the examiners, who are satisfied about its format.

Mr. Foulkes: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. Let me deal with one point of order at a time. The other point raised by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) is a matter for debate and an issue that may be taken into account by the House when it reaches its decision at the conclusion of this debate.

Mr. Foulkes: Further to that point of order, Mr. Deputy Speaker. The point of order raised by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) relates to a point of order raised earlier by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington). A private Member is introducing this Bill.
If the Bill had been introduced by a Government Department, the Minister would be properly briefed and able to give legal opinion. He could then explain the matter to the House. We do not have the answer to that problem because the Bill is being introduced by a private Member who has been inadequately briefed and who cannot deal with the particular problem. Does that not show that you, Mr. Deputy Speaker, should have at least considered the point of order raised by my hon. Friend the Member for Clydebank and Milngavie?

Mr. Deputy Speaker: I assure the hon. Gentleman that I did consider the point of order raised by the hon. Member for Clydebank and Milngavie (Mr. Worthington) and I hope that I responded to it fully. I cannot usefully add to what I said then. The Bill is in order. Some of the reservations that have been expressed under the cover of points of order are matters that could be made in debate and taken into account when the House reaches a conclusion. The Minister is in his place and will doubtless try to catch my eye during the debate. It is not for me to anticipate what he might say, but no doubt he is listening and may feel able to respond as appropriate. In the meantime, we should allow the hon. Member for Eastwood (Mr. Stewart) to make his speech.

Mr. Stewart: It may be helpful if I refer hon. Members to the statement on behalf of the promoters of the Bill in support of this Second Reading, copies of which are available in the Vote Office. In particular, I refer hon. Members to paragraph 6, which will be helpful.

Mr. Wilson: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Eastwood to refer to a paragraph which bears no relevance to the points that he was making? Paragraph 6 states:
The Port Authority would wish their business to have a commercial freedom beyond the severely restricted scope of the present powers of the Port Authority. The aim of the Bill is therefore to free the conduct of the Port Authority's business from the restrictions arising from their present limited powers. The mechanism which the Bill provides to achieve this is the establishing of a two tier company structure;—that is—(a) a successor company; and (b) a holding company.
With respect, Mr. Deputy Speaker——

Mr. Deputy Speaker: Order. Those are not matters for me. Whether the hon. Gentleman is correctly reading or misreading a document that is not an integral part of the Bill is a matter for the House to take into account in reaching a conclusion at the end of the debate. It is not a matter for me to rule on.

Mr. Stewart: The Clyde Port Authority Bill retains the existing powers, duties and responsibilities of the authority regarding the maintenance and improvement of the port undertaking. The core port business——

Mr. Worthington: Will the hon. Gentleman give way?

Mr. Stewart: No. I have already given way about six times to the hon. Gentleman.
The core port business will be operated by the successor company, a wholly owned subsidiary of the new holding company to be created by the Bill. To sum up——

Mr. Worthington: What?

Mr. Stewart: I have not finished. I hope that the hon. Gentleman can contain himself.
The holding company will have wider commercial powers than the authority has at present. The holding company will be a normal public limited company and it will be able to use its resources flexibly as it wishes. The successor company will inherit and preserve the statutory duties of the authority.

Mr. Worthington: Will the hon. Gentleman give way on that very important point?

Mr. Stewart: No, I have already given way about six times to the hon. Gentleman.
I want to refer briefly to the potential effects on employment of the structural changes. It would be fair to say that the restructuring programme will increase job security for the present employees and in due course will lead to increased employment throughout the west of Scotland. The existing employees do not oppose the proposals.
It is expected that four separate elements will be involved in the capital structure of the new body. The authority will put forward an employee share ownership plan—an ESOP. Current employees will be invited to subscribe for shares, for which interest-free loans may be made available.

Mr. Jimmy Wray: Will the hon. Gentleman give way to clarify a point?

Mr. Stewart: Yes, because the hon. Gentleman has not previously sought to intervene.

Mr. Wray: Who will be responsible for dredging? Will the successor company be responsible for dredging the river?

Mr. Stewart: That is a fair question, and the answer is yes. The successor company will be responsible for dredging the river. It will operate under precisely the same duties and responsibilities as does the Clyde port authority at present.

Mr. Worthington: On a point of order, Mr. Deputy Speaker. From a lack of knowledge, the hon. Member who is introducing the Bill may be misleading the House. As I understand the previous legislation, the Clyde Port Authority Order 1965, the Clyde port authority has been given powers to dredge the river; the duty is not there. The hon. Gentleman is saying that the successor company will dredge the river, but I believe that he is giving an undertaking that cannot be given because there have been occasions when the Clyde port authority has sought to withdraw from dredging.

Mr. Deputy Speaker: These are not matters for the Chair: they are matters for debate.

Mr. Stewart: In answer to the question from the hon. Member for Glasgow, Provan (Mr. Wray), I was making the point that the successor company would be under precisely the same duties and obligations as those applying to the Clyde port authority at the moment.
I was talking about the capital structure of the new body. In addition to current employees, past employees, pensioners and their spouses and children will also be

invited to subscribe to shares. The authority will also allow subscription by institutional investors, with preference given to institutional support in the west of Scotland.

Mr. Foulkes: Will the hon. Gentleman give way on his point about employee share ownership?

Mr. Stewart: I shall give way, but for the last time, because I may be straining the patience of the House.

Mr. Foulkes: I hope that this is a helpful question, so the hon. Gentleman may be grateful to me. The hon. Gentleman said that there would be an employee share ownership plan—an ESOP. What percentage of the total shares will be available for that employee share ownership plan? How is it intended that the shares will be distributed between employees? Will it be on an equal or hierarchical basis, based on salary or other considerations?

Mr. Stewart: As I understand it, the intention is to have the proportion of employee shares as high as possible, as far as is reasonable. I cannot give the hon. Gentleman a specific percentage in response to his question, but I repeat that the availability will be as high as possible. It is hoped that shares will be made available to residents in the Clyde port region, and that is actively being considered.
I have not spoken about the general problems of trust ports. They are familiar to the House, which has debated them previously. I emphasise that these proposals are the result of the unanimous view of the board of the Clyde port authority and that there is no significant body of opinion against the Bill among the local authorities in the west of Scotland. No local authority has stated its opposition to the Bill. The Scottish Development Agency, Strathclyde regional council and the unions have all been consulted. Against that background of the absence of opposition from such organisations in the west of Scotland, and in view of the clear merits of the provisions, I hope that the House will give the Bill its Second Reading.

Dr. Norman A. Godman: I wish first to assess the Bill's implications for my constituents and constituency and then to outline my reservations on a couple of broader issues.
As the hon. Member for Eastwood (Mr. Stewart) has said, the Bill has implications for the whole of the Clyde, both for the river and for the firth. In the past few days, I have discussed the Bill with Inverclyde district councillors, with employees at the Tate and Lyle cane sugar refinery and with those employed at the Greenock container terminal—all of whom may well be affected if the Bill becomes law. In addition, I have met John Mearns, the secretary of the Greenock Waterfront Heritage Society, and Derek Ferguson and other members of that society on several occasions. They too have expressed their serious concern about the Bill.
Incidentally, and in respect of a question that I asked the hon. Member for Eastwood earlier, perhaps he or his hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) will correct me if I am wrong, but I believe that I am right in saying that, although petitions of objections cannot now be lodged against the Bill in this House, such petitions can be lodged in another place withing 10 days of the date on which the Bill receives its Third Reading. I believe that that is the case, but I should welcome guidance on that matter because I must


advise the hon. Member for Eastwood that certain interested parties intend to table such petitions if the Bill goes to another place.
My reservations about the ownership claims of the Clyde port authority to, say, James Watt dock in Greenock and to the Greenock container terminal are shared by many of my constituents.

Mr. Foulkes: Is my hon. Friend aware that, at 1 o'clock this afternoon, the Department of Agriculture and Fisheries for Scotland vessel, the Clupa, set sail from the James Watt dock to examine the explosives that had been dumped in the Clyde by ICI? Does my hon. Friend join me in welcoming that move but hope that it will result in some of his and my fishermen constituents receiving adequate and proper compensation for their loss?

Dr. Godman: In that interesting intervention, my hon. Friend has emphasised the importance of the facilities. He is absolutely right. All credit to the Department of Agriculture and Fisheries for Scotland for initiating that exercise. The James Watt dock and other facilities are used by vessels of the fisheries protection service. I agree with my hon. Friend that the dumping of explosive materials causes great concern to me, my constituents and many members of the Clyde Fishermen's Association.
If my challenge to the legality of the CPA's ownership of the waterfront facilities in Greenock is dismissed by the scrutiny of the Committee on Unopposed Bills—if the Bill gets that far—I believe that the Clyde port authority should offer the Inverclyde district council, which is in a real sense the successor body to the Greenock town council, a sum of, say, £2 million by way of compensation for its commercial banditry in my constituency.
When I raised a point of order about the competence of the Bill, I mentioned some contracts that had been signed in Edinburgh in July 1772. I obtained a copy of the document from the Public Records Office in Edinburgh a few days ago. Among other things, it states:
It shall not be lawful nor in the power of the said magistrates, treasurer, town council of Greenock nor their successors in office, to sell,"—
this may well interest the hon. and learned Member for Perth, and Kinross (Sir N. Fairbairn)—
alienate, dispose either irredeemably or under reversion nor wadsett, or burden with infefments of annualment or any other servitudes or burden the said harbour with anchorages, shore, bay, or ring dues, whereby the same may be evicted or adjudged and that all such dispositions, conveyances, wadsetts or other deeds so to be granted by them or their foresaids conveying or burdening the said subjects with any real diligence following thereon shall ipso jure be void null and shall only be effectual against the granter.

Mr. Foulkes: That had to be said.

Dr. Godman: One can see that I have done a little bit of research.
As I said earlier, that feu contract was incorporated in the Greenock Port and Harbours Act 1867 and was further codified in Section 212 of the Greenock Port and Harbours Consolidation Act 1913. It is my view, and as hon. Members well know I am not a lawyer——

Mr. Foulkes: A barrack room lawyer.

Dr. Godman: I may be a barrack room lawyer, as my hon. Friend says.
I should like to hear the Minister's opinion of the validity of section 212 of the 1913 Act. The Act questions the competence of the Bill.
The feu contract has been watched over by members of the Stewart family over the years. In May 1865, an attempt to abrogate the feu contract of 1772 was successfully repelled by miss Jane Stewart of Liberton Manse, near Edinburgh, in a court action. In 1965, the picture changed. The Greenock harbour trust was succeeded by the Clyde port authority. Therefore, Sir John Shaw Stewart's remarkably generous gift to the people of Greenock was eagerly, some would say greedily, swallowed by the Clyde ports authority.
Since that inauspicious day, the Clyde port authority has sold to the Scottish Development Agency the whole of the custom house quay with its fine custom house, which I am pleased to say was recently renovated——

Sir Nicholas Fairbairn: At what price?

Dr. Godman: I am glad that the hon. and learned Gentleman is awake. It was sold, together with all the buildings and land to the west, towards the container terminal. Therefore, eight hectares of land and some fine buildings were sold by the CPA, in an act of banditry, to the Scottish Development Agency for £1·75 million.
The Scottish Development Agency is just as cavalier as the CPA in its attitude towards traditional maritime users of the harbour facilities on the Greenock water front. A couple of years ago I had to speak to the chairman of the SDA about the high-handed behaviour of his officials towards fishermen who were mooring their boats in East India harbour, Greenock. In a letter dated 5 December 1988, I said to Sir Robin Duthie that the Fish Act 1705, colloquially known as Queen Anne's Act, still gave certain rights to fishermen.
I shall quote from that Act, because it is directly relevant to today's proceedings:
the Estates of Parliament authorises and impowers all … subjects to take buy and cure herring and white fish in all sundry and sea channels bays firths lochs rivers etc. … wheresoever herring or white fish are or may be taken. And for their greater conveniency to have the free use of all ports harbours shoars forelands and others for bringing in pickeling drying unloading and loading the same upon payment of the ordinary dues where harbours are built. That is, such as are payed for Ships, Boats and other Goods.
I look forward to the hon. Member for Eastwood assuring me, on behalf of the CPA, that, if the Bill were to be successful, the new company would behave more responsibly with regard to the Queen Anne Act than did the SDA. That Act was passed by the Scottish Parliament in Edinburgh in September 1705.

Sir Nicholas Fairbairn: We have been entertained with a lot of nonsense during the past 20 minutes. The hon. Gentleman's constituency probably contains more wonderful buildings than any of ours are privileged to have. The local authority has been appallingly neglectful. The great customs house has been restored with money given by the Historic Buildings Council for Scotland— alas, to be a value added tax office. The great building beside it is falling down, and the ropeworks is no nearer salvation. I find it strange that anyone should claim in aid the concept of heritage as a reason why the Bill should not be passed, when it would give the new authority powers to redeem and restore that great part of the Clyde.

Dr. Godman: We have just been entertained by a characteristic mixture of buffoonery and exuberant malice. I have sought the assistance of the hon. and learned Gentleman to conserve some of those buildings. I regret that he did not show his usual courtesy in acknowledging my request for his expert help in the conservation of those buildings.

Sir Nicholas Fairbairn: The hon. Gentleman must give way. I replied immediately, and the case is before us. It is his local authority which is stalling, and he should withdraw that malicious remark.

Dr. Godman: I have no intention of withdrawing that malicious remark, because it was not at all malicious. I am not responsible for decisions taken by the Inverclyde district council. I am the Member of Parliament for Greenock and Port Glasgow, not a district councillor.
While the Bill cannot be amended in this place unless it is amended when it is scrutinised by the Committee on Unopposed Bills, I hope that amendments will be introduced when, as appears likely, it goes before an Opposed Bill Committee in another place. I hope that, if the Bill becomes law, no harm will come to the Greenock container terminal. I seek an assurance from the hon. Member for Eastwood on that.
On Friday, I spoke to Mr. Phil Cannie and some of his colleagues who load and unload cargo at the terminal. They also expressed their legitimate concern that the terminal should continue to function as a terminal. Business is undoubtedly picking up at the terminal, which has an important role to play in the local economy. It would be a great shame if the Clyde port authority were to dispose of it. It has an important role to play as a terminal, not as a site for executive-style housing. Trade is picking up, as I am sure the CPA will confirm. Timber cargoes are coming in, and the CPA has talked about investing in facilities for the transportation of wood pulp. It is absolutely essential that the hon. Gentleman gives an assurance tonight.
The same holds good for the James Watt dock, where, among other things, raw cane sugar is unloaded for refining at the Tate and Lyle sugar refinery. There are just two cane sugar refineries left in the United Kingdom. There used to be many more in Greenock, Liverpool and London. One of the remaining two, the Westland refinery, is in my constituency, and the other is in the constituency that is ably and honourably represented by my hon. Friend the Member for Newham, South (Mr. Spearing).
The refinery in Greenock employs about 300 people, most of whom are my constituents. The hon. Member for Eastwood spoke about security of employment in the Clyde port authority. I welcome that, but we also have to think about security of employment for those who are employed in the ancillary industries that are served by the Clyde port authority's maintenance of dock side and other port facilities. The 300 people who work in the refinery have an interest in the Bill.
I remind the hon. Member for Eastwood, Mr. John Mather and Mr. Bob Easton of the Clyde port authority that the House has twice passed without Division two resolutions, both of which acknowledged the need to protect the interests of the east African, Caribbean and Pacific cane sugar producers and those British citizens who are employed in our port and in the sugar refining industry. The second of the resolutions was passed on 2

December 1985 and is reported in columns 107 to 127 of the Official Report. I hope that the House will forgive my lack of modesty when I say that I was able to persuade the then Minister of State, Ministry of Agriculture, Fisheries and Food to accept my amendment to his resolution. He accepted it with his usual grace.
The first resolution was passed under a Labour Administration and the second under a Tory Administration, and both stressed the need to protect our cane sugar refineries. Last week I spoke to Mr. Stevie Kane and other shop stewards in Tate and Lyle, who also expressed their serious concern about the Bill and its implications for their refinery. I hope that assurances and guarantees about the continuation of sugar cargoes into Greenock can be given by the hon. Member for Eastwood. Nothing less will do for my constituents who are employed by Tate and Lyle.
These are important matters, because unemployment in my constituency is still scandalously high—much higher than the level in the Strathclyde region and at least two and a half times as high as the United Kingdom level. The people that I have mentioned have a legitimate interest in the Bill, even though they do not work for the Clyde port authority.
I should now like to deal with the dredging of the Clyde. I know that the Minister for Aviation and Shipping will respond to this. Despite my considerable respect for Bob Easton, the chairman of the Clyde port authority, and for John Mather, the chief executive of the authority, I cannot believe that a private company would continue to dredge that channel on any basis other than a commercial contract. The dredging of the Clyde is an essential operation because, if it were not carried out for two years, the channel would silt up and no vessel would be able to enter the docks at Glasgow, except for the King George V dock. Mr. John Mather and Mr. Bob Easton would not deny that.
Some of my constituents work for Kvaerner of Govan and others work for Yarrow's. Both those shipyards employ several thousand men and women whose livelihood utterly depends on the efficient dredging of that channel. I am not entirely certain of my figures, but I think that I am right in saying that the Clyde port authority pays more than £600,000 towards the total cost, Yarrow's pays at least £100,000 per annum, Glasgow district council pays a similar sum and Strathclyde regional council pays an amount not dissimilar to that.
Kvaerner also pays for the dredging of that navigable channel. When Kvaerner negotiated the acquisition of the yard from British Shipbuilders, it swithered over the deal because of the responsibility that it would have for the cost of the dredging operation.
I seek an assurance from the Minister for Aviation and Shipping and from the hon. Member for Eastwood that that essential work will continue. If it does not, the shipyards at Port Glasgow will be irrevocably ruined within two years by the amount of silt that is carried up the Clyde on each tide. As I have said, I do not think that a private company would carry out dredging other than on the basis of a commercial contract, and I would not blame its shareholders for that.

Mrs. Fyfe: Would my hon. Friend comment on the possibility that dredging might continue but at an unreasonable cost? What are the implications of that?

Dr. Godman: That is a worry for my hon. Friend and for other hon. Members who represent Glasgow constituencies. My hon. Friend must have constituents who work in Kvaerner in Govan and in Yarrows. I listened diligently to the speech by the hon. Member for Eastwood, but I did not hear the kind of guarantee that I am seeking about dredging. Perhaps he knows the Clyde better than I do, and my constituency is not directly affected. If the Clyde silts up, the shipyards may move down to Greenock. That would not break my heart, although my hon. Friends might throw me into the Clyde for even daring to suggest such a move.
Dredging is an essential commitment that must be honoured by those who manage the ports, whether that is the Clyde port authority or its successor body. Perhaps the Minister would tell us who will pay for that essential operation. Will it be the local council, the shipyards or the Scottish Office? I am glad that the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is in the Chamber and listening with his characteristic courtesy and attentiveness. He may be able to tell the Minister for Aviation and Shipping that the Scottish Office will pick up the Bill. I would welcome that. Ministers may laugh, but this is no laughing matter on the Clyde.
I fear that, in time, the new company may be considered fair game by a distant predator in far-off London, Paris, Tokyo or somewhere else. I respect Messrs. Easton and Mather, and I know that both are committed to the Clyde and its well-being. However, they may well be thrown overboard by a London or New York-based predator—although, I hope, not literally.
I hope that the Bill will be chucked overboard. If it avoids that fate because of the skill of Ministers and the Whips Office, I certainly hope that it will be amended in another place in ways that are satisfactory to my constituents, given their legitimate interest in the Bill and their concern for the development of the Greenock waterfront from its container terminal down to James Watt dock and beyond. I do not believe that the Clyde port authority owns those properties, but if I am proved wrong because of past legislation, I believe that that authority should act generously and give a fair amount of compensation to the Inverclyde district council. As it stands, the Bill offers little comfort to the maritime communities on the River Clyde and the firth of Clyde.

8 pm

The Minister for Aviation and Shipping (Mr. Patrick McLoughlin): It may be for the convenience of the House if, at this stage, I make a brief statement of the Government's views on the Bill. On 15 March, the House gave a Second Reading to the Tees and Hartlepool Port Authority Bill. The Clyde Port Authority Bill is an almost identical measure, and the Government's position on both Bills is the same.
Trust ports are slightly odd bodies. They are independent and not accountable to anyone. Their powers and sources of finance are limited, but they must compete with ports run by companies, such as Associated British Ports and Felixstowe, which have the flexibility and accountability that the trust ports lack. It has long been in the Government's mind that it would be desirable if at

least the main commercial trust ports could be converted into companies. Changing the status of a trust port in that way needs primary legislation.
The Government have not been able to find room in their programme for appropriate legislation. It was for that reason that, about a year ago, my right hon. Friend the Member for Southend, West (Mr. Channon), when he was the Secretary of State for Transport, encouraged trust ports, which saw benefits in turning themselves into companies, to bring forward their own private Bills. It is still our intention to bring forward Government legislation on trust ports at the earliest convenient opportunity, but given the pressure on our legislative programme, private legislation is the only way in which any of those ports can quickly be converted into fully fledged private sector enterprises.
The present Bill will not alter the statutory responsibilities and powers that the Clyde port authority has under its existing private legislation.

Mr. Worthington: That is an extremely important assurance and we need to know what it means. I am particularly interested in the issue raised by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman)—the responsibility for dredging. As the Government back the Bill, does that mean that they are making a clear-cut commitment that dredging will continue at its present rate for ever? As I understand it, however, it is quite possible for the successor company to give up dredging when it wants to.

Mr. McLoughlin: I cannot add to what I have just said. The statutory responsibilities and powers of the Clyde port authority, as set out in existing private legislation, will remain the same. Obviously the matter raised by the hon. Gentleman is one to be discussed in Committee as the Bill makes progress.
The existing legislation will be carried forward lock, stock and barrel to the proposed new successor company. successor company will still be a harbour authority. It will be subject also, just as the port authority is today, to those provisions of public legislation that apply to harbour authorities generally. I emphasise that there will be no loss or reduction in existing powers or obligations. That is a very important point, and the House should not be under any misunderstanding. The position is exactly the same as when Associated British Ports was privatised on the Government's initiative.

Mrs. Fyfe: Although the dredging may continue, can the Minister give us any assurances about the cost and who will pay?

Mr. McLoughlin: I am sure that if I started to give such answers, one might easily conclude that this was not a private Bill. I am merely stating the Government's position in relation to the private Bill. Other inquiries must be made through the proper channels when the Bill is in Committee.
The Government support the principle underlying the Bill. It is, however, necessary for Parliament to give careful consideration to the public interest in the conversion of trust port authorities into companies.
We agree with the promoters of the Bill that trust ports have no explicit owners, so it is for Parliament to decide, taking into account any views expressed by the Government, not only whether a trust port should be allowed to turn itself into a company, but who should get


the proceeds from the sale of the shares of that company. The Government's view is that a proportion of the proceeds of sale should go to the Exchequer. We are considering the best way of securing that, but the intention, which Parliament would be asked to approve, would be that 50 per cent. of the proceeds of the sale of shares should be paid to the Secretary of State and paid into the Consolidated Fund whenever a trust port is converted into a company by means of private Act.
The Government regard that as an equitable share of the proceeds between the Exchequer and the new shareholders. In making that decision, we took into account the initiative shown by the Tees and Hartlepool and the Clyde port authorities in introducing their private Bills, the benefits of early privatisation, and the ports' intention to invest in new developments.

Mr. Wilson: What are the Government getting the money for?

Mr. McLoughlin: In the past, we have given certain grants, so it is required that there should be a return to the taxpayer, through the Exchequer, for some of those grants. The percentage was agreed as a broad figure for all trust ports that may introduce private Bills in the future.
We must bear in mind the interests of the taxpayer, who has contributed to the development of the trust ports, and the need to ensure a level playing field between the newly privatised trust ports and those ports already in the private sector. Therefore, on that basis, the present Bill has my full support.

Mr. David Lambie: I was glad to hear the Minister's assurance that the Government will bring in legislation on the trust ports, but that makes me even more suspicious of the Bill.
According to the hon. Member for Eastwood (Mr. Stewart), if the Bill is passed it will have little influence on the present activities of the Clyde port authority. If that is so and given the Government's intention to introduce legislation, why has this Bill been brought in now? Why not wait until the Government bring in the legislation that will deal with all trust ports? We could then have a full debate on the Floor of the House and in Standing Committee and deal with all the issues that have been raised, either in points of order or in the specific questions put by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman).
In common with my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I am curious about the interest that the hon. Member for Eastwood has in the Clyde port authority. He told us that he was interested because certain of his constituents worked in that authority. That is a legitimate interest for any Member of Parliament, but surely it is not strong enough to sponsor a private Bill. Why was not my hon. Friend the Member for Greenock and Port Glasgow asked to bring in the Bill? Why were not the hon. Members representing Glasgow or Cunninghame asked to bring in the Bill?
After the next election, when the hon. Member for Eastwood loses his seat, as most of the Scottish Tory Members will, I ask him to guarantee that he will not

accept a directorship on the board of the new company. I should like the hon. Gentleman to answer that question and to give us an assurance that his future financial interests do not make him enthusiastic about the Bill being given a Second Reading tonight.
I am serious about the matter and hope that the hon. Gentleman will answer that question. Some of his hon. Friends took part in previous debates on privatisation. I do not want to name names, my hon. Friend the Member for Cunninghame, North (Mr. Wilson) can do that, as he is harder than I am. If he is willing to mention the name of the new director of the bus company, Stagecoach, I am sure that he will mention other names if he manages to catch your eye, Mr. Deputy Speaker. What is the interest of the hon. Member for Eastwood in the Bill?
I was suspicious about the Bill when it was drawn to my attention by my hon. Friend the Member for Greenock and Port Glasgow. When I came down from Scotland because of the one-line Whip, I was sure that, after listening to the hon. Member for Eastwood, I would understand why the Bill is necessary. I did not get that information. He said that the only difference would be that the authority could enter into joint ventures to sell property and land.
The hon. Member for Eastwood put us under tremendous pressure by saying that some of my trade union friends were supporters of the Bill—Tom O'Connor from the Transport and General Workers and Lawrence McGarry, the former chairman of the economic and industrial development committee of Strathclyde regional council, who are members of the board. They should have contacted Strathclyde Labour Members of Parliament before they decided to support the Bill given us their reasons. I am worried that they have the same interest in the Bill as I hope the hon. Member for Eastwood will not have after the next general election, when he is no longer a Member of Parliament.
In the statement on the behalf of the promoters, in support of Second Reading, paragraph 2 states that the port authority
is profitable; and it does not rely on government subsidies.
You do not know much about the Clyde, Mr. Deputy Speaker so I must explain that this is a Bill about the Clyde port authority——

Mr. Deputy Speaker: Order. I was unloading cargo and cargo handling during almost the whole of 1947 and 1948, on King George V dock.

Mr. Lambie: I withdraw my accusation, as I understand that it has no foundation. I can cut short my speech as I was about to give you the background to the Bill, Mr. Deputy Speaker, so that you could deal with the important points raised by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington).
The Clyde port authority is a profitable company, but the accounts for a period of years show that it has been profitable not because of its port or harbour activities but because it has sold assets. My hon. Friend the Member for Greenock and Port Glasgow gave us an example. It sold the heritage of Greenock and Port Glasgow to the Scottish Development Agency. Not that I criticise what the agency has done, but the people of Clydeside would have been happier with industry, harbour and port activities, which we had in the past, and not grass, trees and green fields.
The Clyde port authority has been successful because it has sold its assets, but it has reached the stage where it


needs additional help to become more profitable. That is why it needs permission to establish joint ventures. The authority wants to bring in other vultures—not the ones on the roof, but the ones in the private sector—to rip off the heritage of the Clyde, which has been built up by the people of Clydeside for centuries when it was the foremost port in the United Kingdom.
With the development of Europe and the decrease in trade across the Atlantic to the Americas, the Clyde port authority has found itself in difficulty. However, it took the easy road out, and instead of trying to develop port facilities, it balanced the books by selling property and assets. That is my criticism and I have often made it to the authority and on the Floor of the Chamber.
I represent Cunninghame together with my hon. Friend the Member for Cunninghame, North and within our constituencies we have two important ports that are integral parts of the Clyde—the deep-water port of Hunterston and the port of Ardrossan.
I am speaking tonight because I am interested in the development of the port of Hunterston, which is unique in the west coast of Scotland and unique in Europe because it is one of the few deep water ports. However, it has not been developed and the blame lies with the board of the Clyde port authority.
Before I entered Parliament I took part in a trade union and labour movement campaign to persuade the Government to designate the Hunterston peninsula as an industrial area for steel, oil-refining and chemical activities. Those industries could have been developed there because large bulk carriers can come into the port and discharge their cargoes cheaply. The Clyde port authority has not developed the unique facilities of Hunterston; it has allowed it to die.
As my hon. Friend the Member for Greenock and Port Glasgow said, the port is now experiencing a slight upsurge in business, but if there is an adverse decision about the future of Ravenscraig steelworks, the port of Hunterston will be finished because its other activities will not be sufficient to sustain it.
Perhaps I am criticising the Clyde port authority unfairly for not developing Hunterston. I realise that it was placed under servere restraint due to the operation of the dock labour scheme and that a major disaster occurred when the Iron and Steel Trades Confederation, the steelworkers' union, was not allowed to organise workers loading and unloading ships at Hunterston. I realise that after a six-month strike, when Transport and General Workers Union reinforced the position of the dockers, it tied the hands of the Clyde port authority a little. Again, the authority should have fought more than it did.
My hon. Friend the Member for Cunninghame, North and I are also interested in the port of Ardrossan, which has been in decline while it has been under the Clyde port authority's control. When I represented central Ayrshire, which contains the port of Troon, I was interested in Associated British Ports. In Ayr, we were interested in comparing the port of Ayr with activities and development at the port of Ardrossan—there was no comparison. In fact, I often put the case to Ministers for the port of Ardrossan to be taken away from the Clyde port authority and handed over to Associated British Ports, even after it had been privatised.
I hope that the Bill will be thrown out tonight and that the Government will bring forward their proposed legislation for all the trust ports. If it is not thrown out, I

hope that we shall secure amendments to it that will break up the Clyde port authority and withdraw from it the ports of Hunterston and Ardrossan. The future of the two ports does not lie with the Clyde Port Authority plc; it lies with an independent company developing both ports for the benefit of the people of Cunninghame, rather than subsidising a defunct Clyde port authority.

Dr. Godman: Can my hon. Friend advise me about the responsibility of the Clyde port authority as a pilotage authority? Would not the Clyde Port Authority plc still have responsibility as a pilotage authority?

Mr. Lambie: I am afraid that I cannot answer that question, but I am sure that the hon. Member for Eastwood or the Minister will answer it.
I appreciate that I may be arguing against some of my hon. Friends who represent the upper Clyde and the River Clyde, but I want the Hunterston and Ardrossan ports to be split from the Clyde river authority. If the Bill is enacted and the Clyde port authority ceases to be a trust port and becomes a plc, it will get all the money and will concentrate all its development on the buying and selling of property and land.
Therefore, the ports of Hunterston and Ardrossan should become independent, even if that means them being taken over by a privatised Associated British Ports. At least they have shown an initiative that has not been shown by the Clyde port authority. If that authority and my friends who are directors on its board want to become property and land developers, let them. Of course, I appreciate that that would cause a problem for some of my hon. Friends.
I hope that we will not be defeated tonight by the votes of Scottish Members. I am a little disappointed that there is not one representative of the Scottish National party present. Perhaps they are at a wake for the resignation of the chairman of their party, Mr. Gordon Wilson, who today announced his intention to resign at the next conference.

Mr. Holt: It was kind of the hon. Gentleman to point out that no Scottish Nationalist Member is present. He forgot to mention that there are no Liberal Democrat Members present either. Of course, about 20 Scottish Labour Members have an interest in the port, but fewer than half of them have been present tonight.

Mr. Lambie: I was about to refer to the absence of Liberal Democrat Members. Strathclyde has had a fair parliamentary representation tonight. Those Scottish Members who are not here are feeding, and they will soon come in in droves.
I ask the hon. Member for Eastwood to declare any interest, or any possible future interest, in the Clyde Port Authority plc. In view of his arguments and the poor content of his speech, I ask him to withdraw the Bill.

Mr. Bill Walker: I speak in this debate because no one from Scotland can doubt the importance of the Clyde to Scotland's well-being. Ever since the industrial revolution, it has contributed substantially to the well-being, the benefit and the massive enhancement in values for those who live in the area and throughout Scotland generally.
I especially remember the Clyde during the difficult years of the second world war, when troop ships came in from north America and the Clyde was regularly a target for the Luftwaffe. Anyone who saw the Clyde operating as a port in those days could never forget the extremely difficult circumstances with troop ships coming in from north America or going out to the middle and far east.

Dr. Godman: Will the hon. Gentleman confirm that the Clyde port authority came into being in 1965?

Mr. Walker: I do not wish to become involved in pedantic arguments. I hope that the hon. Gentleman appreciates that I am commending the Clyde's contribution to the well-being of the nation.

Dr. Godman: In view of the hon. Gentleman's stout defence of all those employed in the whisky industry, does he agree that it is a great shame that the overwhelming majority of whisky products are exported not from Greenock or Grangemouth, but from English ports? Is not that a matter for deep regret?

Mr. Walker: I make no apology for saying that the whisky industry carries out its business in the most efficient way possible, however that is done. The whisky industry has a future in its present form and it will continue to have one, provided that it exports its products in the most cost-effective and efficient way. It is not my job to second-guess the whisky companies in determining the routes through which they send their products abroad. My concern is to ensure that the £1,000 million-plus of whisky products that are exported continue to be exported. It has never been my desire, in public or in private life, to impose upon private sector companies restrictions that would in any way limit their performance in the world marketplace.

Dr. Godman: I repeat, the hon. Gentleman looks after the interests of those of his constituents working in the whisky industry with remarkable vigour. However, if the major ports on the Clyde and the Forth were to disappear, the subsidies offered to the whisky distillers and blenders to take their products out through English ports would surely disappear.

Mr. Walker: The responsibility for determining the place from which exports leave the country or imports arrive is largely that of the companies which ship products and the shippers. If they decide to use a particular port because it is more cost-effective than another, I hope that the port that has not been chosen will look carefully at whatever are the cost advantages, real or imagined, as seen by the shippers and shipping companies. We hope that all areas of Scottish activity, including ports, will adapt to meet the changing demands and conditions of the modern world, so that Scotland can compete not only with overseas ports but those elsewhere in the United Kingdom.
One cannot ignore recent trade history. Since its inception, the port authority has been obliged to face a number of dramatic changes in trade patterns. Like its predecessors, it has been compelled to adapt. The first of those changes was the implementation of full-scale containerisation on the world general cargo and liner trade routes. Those of us who witnessed that change occurring throughout the United Kingdom know that the ports that adapted quickly to containerisation thrived and grew,

whereas ports that failed to adapt did not do so. Incidentally, I do not make any political, narrow, partisan points, because it is not that kind of Bill. It has the support of the Transport and General Workers Union, and of elected councillors, which I am delighted about.

Mr. Worthington: Will the hon. Gentleman give way?

Mr. Walker: The hon. Gentleman is rather impetuous. He does not allow anyone to complete a sentence.
I hope that Opposition Members accept that there is nothing narrow or partisan about the view that I take. Instead, I am concerned to see the Clyde develop in the best way possible. I was emphasising that unless one adapts quickly, and if restrictions are placed on the way in which a company or a trade union can operate, it serves as an impediment to change. Any impediment to change must present a disadvantage by comparison with ports that are able to change.

Dr. Godman: I point out to the hon. Gentleman that no impediments are being presented by the management or workers at the Kvaerner yard at Govan or at Yarrow. At both yards, management and workers are keen to win new orders. In the near future, Kvaerner may secure an order for three large vessels. That would be most useful to my constituents, because I fervently hope that Kincaid will build the engines for those vessels.

Mr. Walker: I trust that the hon. Gentleman is not suggesting that I stated that there are any impediments. I was only expressing the hope that right hon. and hon. Members in all parts of the House want to see the Clyde flourish—that we want it to adapt to meet the changing demands of today and tomorrow. We may differ on the route taken to achieve that. All the evidence from eastern Europe is that the capitalist, private-sector methods are far more efficient, create more jobs, and produce far more wealth than the narrow attitude that is the alternative, if I may put it that way.

Mr. Worthington: So the hon. Gentleman is being non-political.

Mr. Walker: I repeat, socialism does not work, and all the countries of eastern Europe are rejecting it. I was trying not to be partisan, but was responding to the narrow partisan points of Opposition Members. If they cannot take it, they should not make their points in the first place.
The Clyde port container terminal was constructed on the site of the Princes pier at Greenock and received its first ship on 15 March 1969. The terminal, with its depth of water of 42 ft at low tide, with a back-up area of 42 acres, and with rail connections to the major industrial centres of the United Kingdom, had by 1973 attracted 13 shipping lines. I hope that Opposition Members view those remarks as promoting the Clyde.
Events gradually overtook the north Atlantic trade. The hon. Member for Cunninghame, South (Mr. Lambie), in his interesting speech, quite properly defended the interests of his constituents—even if it was at the cost of the constituents of some of his hon. Friends. There is nothing odd about that, because the hon. Gentleman has a track record for it. No one could ever accuse the hon. Gentleman of neglecting his constituency.

Dr. Godman: The hon. Gentleman mentioned the Clyde port container terminal, which is in my constituency. Everyone acknowledges that that terminal has seen bad


times—largely brought about by fluctuations in maritime trade patterns. However, the vastly reduced number of men working at that terminal today are striving hard to increase its efficiency, and they are beginning to win.

Mr. Walker: I am delighted to hear that. I am not in any way being critical——

Dr. Godman: Yes, you are.

Mr. Walker: I am not. If the hon. Gentleman will read my speech tomorrow, he will see that I acknowledge, as does the hon. Member for Cunninghame, South, that the development of European trade in both directions is a substitute for what used to be the United Kingdom's major trade area in the north Atlantic. Anyone who doubts that trend need only study the changes in the trade patterns. One cannot blame the people working in the ports or the port employers for changing trade patterns. Whether one is trading in a port or in a high street, if one does not change to meet new patterns, one goes out of business. No right hon. or hon. Member wants to see Clyde port do that.
The hon. Member for Cunninghame, South referred in particular to the importance of Hunterston to the west and the whole of Scotland. There is no question but that Hunterston and Ravenscraig depend on each other. In Hunterston, Scotland has a facility of which it can be proud. I look upon it much as I view Prestwick. Both are great Scottish assets. It is up to us as Scots to identify how we can best influence those facilities being maximised, to the benefit of Scotland. That is why I am distressed that so many foolish and sad things are said about Hunterston, Ravenscraig and Prestwick.

Mr. Foulkes: In the past, I have had cause to be grateful to the hon. Gentleman for all the positive things that he has said about Prestwick, for which he has been a doughty campaigner. Was it the Secretary of State for Scotland's U-turn on Prestwick that really turned the hon. Member for Tayside, North (Mr. Walker) against him and led the hon. Gentleman to campaign for the present Secretary of State's replacement by the hon. Member for Stirling (Mr. Forsyth)? If so, that important milestone should be recorded. People should know about it. The primary responsibility belongs to the Secretary of State for Transport. He should be warned to look after his back.

Mr. Walker: I am fond of the hon. Gentleman in many ways. I hope that that does him no political harm. He has rightly drawn the attention of the House to the fact that we have joined together in campaigns in which we both believed. I should like to know what his views are on two-minute roof tax Donald. The Labour party has problems in Scotland. On which side of the fence does the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) fall? I shall go no further down that road. I have merely responded in kind to the hon. Gentleman's jibes.
The fact is that 50 per cent. of the Clyde port authority's traffic goes through Hunterston which represents 43 per cent. of its revenue. The Clyde port authority has a duty and a responsibility to ensure that the port is used to its fullest extent to benefit Scotland. Furthermore, Ravenscraig must continue to be the most cost-effective and productive plant that the British Steel Corporation owns. We must compliment the workers at Ravenscraig on their remarkable production performances.

Mr. Lambie: To take up the hon. Gentleman's point about Hunterston, my criticism of the Clyde port authority is that it has spent too much time on property development too little time on developing the harbour and port facilities, especially at Hunterston. If it had spent more time developing Hunterston instead of selling land in the constituency of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), we might not have had to come here today to deal with this stupid Bill.

Mr. Walker: I shall try to answer the hon. Gentleman's question on the basis of principle rather than detail. I do not know what the Clyde port authority has been doing. In principle, however, it is up to any corporate body that owns land or property to maximise its assets for the benefit of the whole undertaking. That could mean selling off land for development so that the core part of the business can be successful. The core business may require substantial funds if it is to grow. It would be better to use asset funds, on which no interest has to be paid, for those developments rather than borrowed funds. I hope that the Clyde port authority has been using its assets to create the maximum advantage for the core part of the business. I believe that it probably has, since it appears to be profitable. That must be welcomed by us all.
The Clyde port authority board unanimously support-ed the use of the private Bill procedure. It must have considered a variety of options—[Interruption.] The hon. Member for Cunninghame, North (Mr. Wilson) is laughing. He sits on a board. I hope that the board on which he sits takes responsible decisions. If it does not, he and the other board members are failing in their statutory duty. Perhaps he is not unaware of a director's statutory duties.
I believe that in this case the board considered the options and decided unanimously to support the private Bill procedure. As it drew on the experience of so many interests, I have no hesitation in saying that I hope that the House will ensure that the Bill is given a Second Reading and is considered in Committee. If it does, Scotland's interests will have been well served.
The Clyde will continue to be an important port. The developments within Europe mean that trading patterns have changed, but during the next 30 years I believe that north Atlantic trade will be far more important that it has been during the past 20 years. Changes to the world's political power blocs will result in changes to trading patterns. It would be most unwise of us to run down this great national asset. I take the same view of the Clyde as I do of Prestwick—that we should look after and nurture it. If we do, it will still be there when trading patterns alter, as I believe they will. Too often in the past we have said, "If we had only known then what we know now." By then, however, it is too late.

Dr. Godman: With regard to the nurturing of the Clyde, is the hon. Gentleman satisfied with the assurances that have been given about continuing the dredging of the channel?

Mr. Walker: I am satisfied that the successor company will assume all the responsibilities of the present authority. On that basis, I assume that it will continue to do what has been done in the past. The Bill does not change the responsibilities; it merely gives them to the successor company. The statement says:


The main purpose of the Bill is to provide for the transfer of the Port Authority's undertaking to a Companies Act company, ('the successor company'), with the consequential dissolution of the Port Authority. The successor company would at all times be a wholly owned subsidiary of another Companies Act company ('the holding company')".
The successor company will assume all the responsibili-ties of the Clyde port authority. The hon. Gentleman and his colleagues may not be satisfied that the authority would honour its responsibilities. However, the successor company would have to do so.
It is important to set up a holding company. That is the big difference. The holding company will be in the market place in a way that the Clyde port authority is not. It will have the opportunity to obtain funds, which the Clyde port authority cannot do. I should have thought that that would be of advantage to the Clyde.
If we are all interested in doing what is best for the Clyde—I hope that we are—I should have thought that experience has taught us that, if we do not change, we may end up with another albatross round our necks, and we do not want that.

Mr. Tony Worthington: I am grateful to the hon. Member for Tayside, North (Mr. Walker) who, in the past two or three minutes, gave us more explanation of the structure of the Bill than we were given by the presenter, the hon. Member for Eastwood (Mr. Stewart). His explanation was off the top of his head, however, which is a remarkable sign of the contempt with which the House has been treated.
The Bill is of considerable importance, and the House should treat it with the seriousness it deserves. It concerns an authority that is responsible for 450 square miles—not only the port of Glasgow but the ports of Ardrossan and Hunterston, not to mention all the sea lochs around the Firth of Clyde. It seems that we are to approve on the nod a change in the way in which the port area is administered.
The hon. Member for Eastwood is usually the most affable of Members, but on this occasion he has treated the House with some contempt by failing to brief himself on the implications of the Bill. Tonight, he is in the position of a Minister; usually, Ministers presenting a Bill go through it and explain the implications of each clause. That the hon. Gentleman failed to do. All he gave us was a recitation from what I can only assume was a public relations brief of about two pages from the Clyde port authority. The hon. Gentleman completely failed to answer the questions that were put to him.
I object to the Bill not because I regard the Clyde port authority as a satisfactory body—I do not. I regard it as highly unsatisfactory, and I think that it should be restructured so as to reflect the interests of all the people of Scotland, not just those of the people who run the authority now.
Is the Clyde port authority a public or a private body? We do not know whether it is fish or fowl, whether it is operating in the commercial market or in the public sector.
It is also most unsatisfactory that the authority should be the responsibility of the Department of Transport—a fact that is not widely known. I suspect that most people in Scotland think that it is linked with the Scottish Office. I notice that sitting on the Government Front Bench is the

third of a rapidly changing sequence of Ministers that we have seen during the passage of this Bill—the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). In theory, he is the Scottish Minister with responsibility for transport, but in practice his relationship with the Bill is peripheral. He has no brief for or interest in the matter. The Minister for Aviation and Shipping has apparently disappeared to an event that he considers of greater importance—

Mrs. Fyfe: Why?

Mr. Worthington: I do not know.
I have tabled parliamentary questions and written to the Minister at the Department of Transport about this matter. I asked:
What means of redress or appeal exist in the case of maladministration or inefficiency by a body such as a port authority.
In other words, I asked what people can do if they think that a port authority is not doing its job. The Minister replied:
Harbour authorities that are companies or statutory trusts are autonomous bodies running commercial undertakings. Any complaint should be made to the chief executive or chairman, and if satisfaction is not obtained the complaint can ultimately be pursued through the courts."—[Official Report, 2 November 1989; Vol. 159, c. 272–3.]
So one can do nothing about these bodies save appeal to the people running them.
We are talking about a collection of individuals who emerge through the strange processes of the selection of the great and the good to sit on these bodies. They are not appraised, and as far as I know the Department of Transport issues no reports on their past credibility. These bodies seem to go on and on, pursuing a course that may be good or that may be distinctly mediocre.
In November 1989 I wrote to the Minister about accountability, and he replied as follows:
Once the Board members are appointed, however, they are entirely responsible for the day-to-day running of the Authority using their collective judgment of what is in the best interest of the port and operating within the terms of the governing parliamentary legislation".
So it appears that the board members, appointed by the Department, are not accountable. The Minister goes on to speak of the authorities' powers:
In particular the 1965 Act provides that it is for the authority to decide whether to dispose of land, what price to seek and what conditions to impose on its release".
That power does not sound limited in the way that we heard it described earlier.
If Parliament had had any sense, we should first have considered whether the Clyde port authority had been operating efficiently and effectively. If we discovered that it had not been, we should then have considered what reforms to introduce. Instead, we have given the port authority—if it has done a bad job, this would seem wrong —the power to initiate its own legislation. At no point did the hon. Member for Eastwood provide us with an appraisal of the sort of job that the authority has done. Has it effectively developed the work of the area, or has it been ineffective? All we heard was a statement of what it wants to do. That is not an effective way of running a great port on an important estuary. We needed to hear an analysis of what the authority has been doing for the past 40 years and of what changes are necessary.
That seems to me to be going about things back to front. We have only the assertion by the Clyde port authority about what has gone wrong, rather than an


independent analysis. I would have welcomed it if the National Audit Office—or some such organisation—had examined the way that the port authorities operate, and concluded that changes were necessary. We need a clear statement of what is being sought and of the responsibilities.
In his brief and perfunctory introduction to the Bill, the hon. Member for Eastwood—who is now about to be even more perfunctory, and leave the Chamber—stated that the powers of the Clyde port authority were restricted. However, he was unable to say in what way. The original legislation—the Clyde Port Authority Order Confirmation Act 1965—says what the duties and powers of the port authority will be. I shall read out those powers, because it is necessary for hon. Members to judge whether they are restrictive.
The Act says:
It shall be the duty of the Port Authority, subject to the provisions of this Order, to take such steps from time to time as they may consider necessary for the maintenance or improvement of the port and the accommodation and facilities (including navigational facilities) afforded therein or in connection therewith".
The Act goes on to give what seem to be all-embracing powers. On page 8, section 15 says:
The Port Authority … may … manage, use or develop land belonging to them as they think fit".
That does not seem to be restrictive.
The Act continues:
in addition may with a view of selling or otherwise disposing of any right or interest in the land after the development is carried out … retain any part of land belonging to them … develop it or procure its development for use wholly or partly by other persons.
I am open to persuasion that the powers are too restrictive, but that does not seem to be the message from the Act.

Mr. Foulkes: It is not the message from me, either.
I appreciate the diligence with which my hon. Friend has gone into the matter to show the wide powers of the Clyde port authority. Earlier in his speech, he referred to navigation lights; if he thinks that the Clyde port authority has wide powers, he should put his tremendous energy into examining the Commissioners for Northern Lights. I have never come across a more powerful feudal organisation —I was going to say, on this side of the iron curtain; however, these days even on the other side of the iron curtain there are not such powerful organisations. When he has finished dealing with the Clyde port authority, will my hon. Friend have a wee go at the Commissioners for Northern Lights?

Mr. Worthington: I am graterful for that suggestion for my future work programme. I shall bear it in mind, and add it to the long list of fascinating subjects on to which my hon. Friend wishes to divert me.
I am not aware that the Clyde port authority has been unable to be involved in property development. It has been able to diversify from explicit port-related work on the Clyde. My hon. Friend the Member for Cunninghame, South (Mr. Lambie) said that it had done that excessively, but there was no evidence that it was unable to develop the areas that were surplus to port requirements. Within Glasgow, I believe that there are areas that are the subject of development now: I may have missed a declaration on it, but I gather that in the Braehead area of Renfrew there is a proposed major shopping development awaiting the

decision of the Secretary of State. The Clyde port authority has been involved with the Tarmac Group of Companies to develop it.
Let us take the Glasgow garden festival and the construction of the exhibition centre: the port authority has correctly realised that those developments should take place. I am not conscious of any restriction in its powers to stop it doing that effectively.
Dredging is another matter of concern. We have the right to ask the Minister and the hon. Member for Eastwood to clarify the power to dredge. Section 16 of the Clyde Port Authority Order Confirmation Act states:
The Port Authority may from time to time"—
there is the controversial "may" with which we always have difficulty—
deepen, dredge, scour and improve the bed and foreshore of the river and firth of Clyde within the port or in or near any approach to the port".
There is a power whereby the port authority can use its resources to dredge, which is very different from saying that it "shall" always do what is necessary to enable the area to operate as a port. [Interruption.] The hon. Member for Eastwood is still wandering around. He is using the old Scottish Tory device of moving around to make himself seem more numerous.
I am not reassured when the hon. Gentleman or the Clyde port authority says that nothing in the legislation changes the authority's powers. During the past 10 years, the authority has said to other bodies, such as the regional and district councils and the shipyards, "We may need to withdraw from this activity unless we are supported in the dredging." The hon. Member for Eastwood may by now in his travels have received advice on whether my reading of the Act is correct—that there is no duty on the port authority to dredge the Clyde and to maintain Glasgow as a port. I believe from my reading of the legislation that it could withdraw from that activity.
The Opposition realise the importance of not allowing the Clyde to silt up. I would assume that, because the port authority is in the public domain, public money would always be made available to maintain the Clyde. What will happen under a privatised company? The hon. Member for Eastwood may assure us that that the successor company—although he did not dignify his speech with technical terms such as "successor company"—inherits the same obligations as the Clyde port authority.
From my reading of the Act, I believe that it "may" dredge, not that it "shall" dredge and that it is open to a privatised company to up sticks at some stage and say that it is not in its commercial interests to dredge the Clyde. I am willing to give way to the hon. Member for Eastwood —he was generous to me earlier—if he wishes to assure me that the Bill maintains in perpetuity the duty on the Clyde port authority or the successor company to dredge the Clyde.

Dr. Godman: Does my hon. Friend agree that the dredging problem is exacerbated by the need for the Clyde port authority to purchase a new dredging vessel in the near future? Will not such a vessel cost several million pounds?

Mr. Worthington: I am grateful for my hon. Friend's intervention. It is realised that, if the Clyde is to be effectively dredged in the future, outdated equipment needs to be replaced. But that decision has been made by a public authority which realises the importance of its


public duty to dredge the Clyde. Whether the successor company would make a commercial decision along those lines, I do not know.

Mr. Wilson: Does my hon. Friend agree that it is incredible, and deeply worrying, that the invitation that he offered so freely to the sponsor of the Bill was not taken up? Does he agree that Opposition Members' meeting with Clyde port authority representatives confirmed what he has said? There is no absolute obligation to dredge. Does my hon. Friend find it as incredible as I do that the sponsor of the Bill is not prepared to answer his question one way or the other?

Mr. Worthington: I am stunned by the failure of the hon. Member for Eastwood to know his Bill sufficiently well to give even that most basic reassurance. I am sure that, on being told that the Clyde port authority was to be privatised, the first question that Opposition Members would ask would be, do the arrangements safeguard the ability of the port of Glasgow to continue to operate as a port? It is difficult to continue as a port without one basic ingredient, which I have always thought to be water. If there is no water in a port, it is difficult to see how it can operate effectively. Yet the hon. Member for Eastwood seems quite unable to assure us that there will continue to be water in the port of Glasgow.

Mr. Lambie: Does my hon. Friend agree that the behaviour tonight of the hon. Member for Eastwood (Mr. Stewart) justifies the Prime Minister's sacking him as a Scottish Minister?

Mr. Allan Stewart: Answer.

Mr. Worthington: I would always defer to the hon. Member for Tayside, North (Mr. Walker) on these matters, as he seems to be the adviser on them.
We are told that the successor company will have the same powers. We need to know just what provisions have restricted the development of the company. We need that spelt out in much greater detail.
Page 9 of the Bill deals with the functions of the Clyde Port Holding Trust that is to be established. I regret that I have had to take so long on this subject, which could have been dealt with earlier by the hon. Member for Eastwood. Clause 13(2) says:
(2) The Trust shall consist of a chairman, a deputy chairman, and not less than eight nor more than eleven other members.
(3) The persons who immediately before the first transfer day are the chairman, the deputy chairman and other members of the Port Authority shall become respectively the chairman, the deputy chairman and other members of the Trust".
In other words, the members of the port authority will succeed themselves. That is not usually what happens when someone dies.
Clause 14 says:
The Trust shall … give to the holding company such directions as the Trust consider appropriate in respect of the matters in respect of which the Trust may give directions as mentioned in section 8".
That refers to the securities of the new company. Earlier, the Minister made a somewhat perfunctory statement, which we could not examine because he had departed, to the effect that half the proceeds of sale of the company

were to go to the Treasury. However, we do not know why it should be half the proceeds, or the basis on which that was determined.
The trust is the key factor in setting up the holding company and the successor company. According to clause 14:
The Trust may, in carrying out their functions in relation to the disposal of securities of the holding company, provide for one or more employees' share schemes to be established in respect of the holding company; and any such scheme may provide for the transfer of shares without consideration.
There is agreement on both sides of the House that employee share schemes are good. We want them to develop, but within egalitarian principles. We would want to ensure that there was a genuine co-operative venture, instead of half a dozen shares for someone on the ground floor of the company and several hundred thousand shares for the people at the top of the company.
I understand the phrase "without consideration" in clause 14 to mean free. Some of the shares in an employee share scheme should be transferred for free. I have no objection to that if that is done fairly, and that could be a good idea for the employees. However, clause 14(5) states:
The Trust may transfer securities of the holding company without consideration"—
that is, for free—
to bona fide employees of that company or of a subsidiary of that company (including any such employees who are members of the Trust).
The Clyde port authority board was established by statute and the members appointed by the Secretary of State. It is promoting legislation which transfers the affairs of the port authority to the Clyde Port Holding Trust which will set up the arrangements for the successor company and the holding company. It will also have the power to award itself shares.
It is clear that some present members of the Clyde port authority will become members of the trust. No one other than CPA members can become members of the trust. Those people are promoting legislation which will inevitably give them powers to allocate free shares to themselves in the new company.

Mr. Foulkes: That is better than winning the pools.

Mr. Worthington: I would not make that assertion, because it may not be a very important inheritance. It depends how moderate the trust is in its willingness to allocate to itself what was a public asset. We must also consider the lack of clarity about other members of the CPA and whether they are employees or whether the Clyde Port Holding Trust could designate those people as employees. Those people could receive a benefit in future.
It is unacceptable that a rambling Member of Parliament, the hon. Member for Eastwood, should present this private Bill in such a perfunctory way. The Bill does not make clear the provisions for the members of the promoting body. We have a right to know whether the CPA members will benefit financially from the proposal. If I have misread the Bill, I apologise for any mistaken inferences.
According to my reading of the Bill, the members of the Clyde port authority as presently constituted can, will and indeed must become the Clyde port trust, because no one else can do so. They can then decide the terms upon which employee share ownership will be distributed and they can then allocate shares to themselves "without consideration"


—that is, without paying money for them. We have a right to an explanation of that, and I wish that there was a Minister on the Treasury Bench who could explain it.
I turn now to the importance of the meaning of "the Clyde" in the west of Scotland. We are not talking simply about a commercial undertaking. The Clyde is a most powerful symbol of the wholeness of life in the west of Scotland. It is a symbol of all the issues relating to the environment, tourism, commerce, leisure and sport. Therefore, in addition to the narrow commercial interests of the holding and successor companies, all those aspects need to be taken into account.
I referred earlier to dredging but that issue needs further consideration because of its general importance and the responsibility attaching to other bodies. At present, other contributing bodies include the regional council, which has been obliged or induced to contribute largely because of the importance of the Clyde to the sludge boats, which are the major daily users of the Clyde. They go up and down the river and out into the firth——

Mr. Lambie: And pollute the beaches of Ayrshire.

Mr. Worthington: Yes, as my hon. Friend the Member for Cunninghame, South has said, they pollute the beaches of Ayrshire.
That antiquated way of disposing of sewage has been questioned both by the European Community and by sane environmentalists. The regional council will be obliged to stop being involved in that activity. Eventually, therefore, the regional council will no longer need to use the Clyde for that activity. In addition, I understand that, under the provisions of another EC directive, dredging the Clyde and dumping the waste elsewhere is no longer regarded as acceptable, and that land-bound disposal methods must be used as well. Therefore, the regional council may lose its obligation and feel that it no longer has a duty to support dredging.
If I might correct my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), I understand that Glasgow district council has contributed £100,000 on a one-off basis. We all hope that Govan Shipbuilders and Yarrow Shipbuilders will continue into perpetuity, but nothing is absolutely certain in this world and those companies contribute substantially at present.
The main issue here is that a cost that used to be met entirely by the port authority is at present met only partially by that port authority, so I want to know who will carry out the dredging in the future in view of the cost of that activity. If I have to second-guess what will happen in 10 years—if the Bill becomes law—I imagine that the successor company will have walked away from those responsibilities, and I guess that some public authority will have to march in to pick up the cost of the dredging. It may be the regional council or the district council. A private Bill has been used as a mechanism for dumping a public obligation. It seems to be going through without being adequately examined.
A recent Strathclyde joint working party report, imaginatively called the "River Clyde Project" and, more poetically, "A corridor of growth", in which the region and associated districts—not just Glasgow, but Clydebank and Dumbarton on the north of the Clyde and, I assume, Renfrew and Inverclyde—took part. The Scottish Development Agency and the private industry group Scottish Action also took part, as well as the Clyde port

authority. It was possible for those public organisations to come together to consider the Clyde as a whole and a strategic affair. They recognised that it was not the sort of project that was best dealt with piecemeal.
Earlier, the hon. Member for Tayside, North failed in his synopsis of world history to explain how Glasgow had been regenerated in recent years. One fact is absolutely certain—not a person in Britain could say that Glasgow had been regenerated by the workings of the market. There is not the slightest doubt that, where regeneration has occurred, it has been because of the actions of local authorities, where relevant, the Government—I pay tribute where that has happened—the Scottish Development Agency and other public organisations that have created the leverage that has led to private investment. Without that public investment in the first place, there would never have been any private investment.
I am worried that, with the Bill, we shall once again lose the ability to act strategically and consider the Clyde, all that river valley and estuary, in an overall context. That is an important power. We are talking about a 20 sq km area that can be developed for industry, housing or retail. The area will also be progressively more important in terms of water sports and leisure. We must ensure that the public interest is represented there, rather than the narrow commercial interest. If the port authority is given the freedom to develop on a purely commercial basis, that will be inadequate.
When considering the Bill—I hope that it will not receive a smooth passage through the House and the other place—we must ask whether it is genuinely geared to the interests of the people of the west of Scotland, because——

Mr. Harry Ewing: I know that my hon. Friend is coming to his conclusion. I have listened to quite a bit of the debate, and no one has told the House where the demand is coming from. It is all right to say that there has been no opposition to the proposals from the Scottish Development Agency, the regional council or a number of organisations named by the hon. Member for Eastwood (Mr. Stewart), who wants to keep Eastwood out of Glasgow, but not out of the port of Glasgow. But where is the demand coming from? Is it coming from the present board members of the Clyde port authority? If that is the only source, is that not a cause for the deepest of deep concern?

Mr. Worthington: I share that concern. As I said earlier, I am not rising in objection to the Bill, because I am satisfied with the present state of affairs in the Clyde port authority. I became interested in the affairs of the Clyde port authority because of its lack of action in the area covered by my constituency. Over many years, the Clyde port authority has simply allowed the Rothesay port area to become a tip. We did not really need any legislation to get an improvement. What we needed was a bit more activity by the port authority. In 1981, part of Clydebank was designated an enterprise zone. It was hoped that the special status of that zone would lead to a regeneration of Clydebank. I know that many hon. Members who go there will see that it has been transformed in many ways.
I give credit to the Government, the Scottish Development Agency, the regional council and the district council who have worked together to achieve enormous success in every part of Clydebank except the Rothesay


dock area. In that area, the port authority failed to take action not because of any restrictions in the relevant Acts but because of lethargy. It simply failed to realise the potential of the area and hoped that something would come around the corner to cause change to occur in future.
Last year, the Rothesay dock area was to be regenerated by the import of coal. Hon. Members may remember the dispute last year between the South of Scotland electricity board and British Coal. Suddenly, the Rothesay dock was to be the means by which huge amounts of coal would be imported. That was not to be, and a simple letter such as the one that I sent to the SSEB established that there would not be such an amount of imported coal. The area could have been regenerated without any change in the legislation. That regeneration did not occur—not because of difficulties with the legislation but because of difficulties with the Clyde port authority.

Mr. Brian Wilson: I have an interest in the Bill not only because of my Front-Bench role but because both Ardrossan and Hunterston are in my constituency. My main concern in the debate and in the weeks ahead is to ensure that the Bill, whether or not it becomes law, should be the subject of public debate. That has not happened in past months and that is why there is such strong opposition in the House to the Bill's simple passage.
Important points of principle are at stake and substantial public assets are to become private assets by means of this device. The House was entitled to more explanation and justification than we heard from the hon. Member for Eastwood (Mr. Stewart). His explanation for the Bill bordered on the insulting. It was completely inadequate and did not begin to deal in detail with the Bill or its clauses.

Mrs. Fyfe: Would my hon. Friend care to comment on the fact that the hon. Members for Brigg and Cleethorpes (Mr. Brown) and for Langbaurgh (Mr. Holt) are in the Chamber and that both of them were involved in similar Bills for other ports? Neither represents a Scottish constituency. Is there some strange community of interests on the other side of this debate?

Mr. Wilson: My hon. Friend takes me easily to the next part of my speech. It is vital to consider where this whole idea has come from. It has not come from the board of the Clyde port authority, year after year sitting in frustration, fretting over the lack of powers at its disposal.
I understand that the Minister for Aviation and Shipping had to leave the Chamber. He explained to me his reasons for that. In his brief contribution he rightly gave credit to the former Secretary of State for Transport, the right hon. Member for Southend, West (Mr. Channon). The chairman's statement in the annual report of the Clyde port authority gives us the background to all this. It states:
Back in 1988 the then Minister of Transport, Paul Channon, informed the trust ports that any request for increased powers would only be granted if the ports were prepared to accept a greater measure of accountability as in the case of a limited company to its shareholders. The preparation work in this has been very complex and time

consuming for the authority's senior executive and we now look to the Government for their full support as the legislation progresses through Parliament.
The Bill is not a private initiative from the Clyde port authority, but a Government one. The work is being done for the Government by people such as the hon. Members for Eastwood, for Langbaurgh (Mr. Holt) and others who are involved with similar Bills. The demand does not come from the people who work on the Clyde or the communities located there which depend on that river for commerce, industry, leisure and other purposes.
The undoubted consequences of the legislation will be a further downgrading in the importance of the river Clyde and a greater emphasis being placed on the property development potential of its river banks. That is bad news for marine users and shipyard workers. It is a setback to the revival of the Clyde as a centre of marine trade. This is an enabling Bill that will enable a privatised company to turn public assets into private ones and to turn public sectors into centres of private speculators.
If the aims of the Bill are as stated I find it slightly odd that the Clyde port authority found it necessary to trawl entire west central Scotland to come up with the one Conservative Member to be found in that territory—and at that an hon. Member who has no direct interest in the river Clyde. The way in which the hon. Gentleman presented the Bill and the way he pranced round the Chamber, like the sugar plum fairy, in search of little bits of information to elaborate the bare bones of his opening speech, reflect no great credit on the Bill that he is seeking to promote.
We are dealing with substantial public assets. According to the balance sheet of the Clyde port authority for the year ended 31 December 1989, the total assets of the authority, less current liabilities, are £52,069,000. Conservative Members have given a slipshod performance and much of their debate has been light-hearted. A few of them have read from briefs and have had little of substance to say in defence of the case. In such a perfunctory manner is the House expected to hand over £52 million of public assets to a newly created private company? That is what Conservative Members are trying to push through.
My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) is right to point our that the people who will take over the running of that private company have been placed in their present positions of responsibility and trust to perform a public function rather than to run that private company. We believe that that must be exposed to far more rigid scrutiny than has so far been applied.
The only justification that the hon. Member for Eastwood gave for the Bill was that the existing remit and powers of the authority are so restrictive that it must cast them off to acquire great new liberating powers. My hon. Friend the Member for Clydebank and Milngavie and other hon. Friends have already called that concept into serious question. My hon. Friend the Member for Clydebank and Milngavie told us what the authority can do for better or worse and my hon. Friend the Member for Cunninghame, South (Mr. Lambie) and other colleagues told us what the authority had not done when it was within its powers to act, had it had the will.
As a general rule, it is reasonable to say that a body which has not satisfactorily used, extended or lived up to its present powers should not come to the House lightly and demand a new set of powers which have the interesting


side effect of turning it into a private company. It is worth quoting from clause 13(3) of the Bill, which states who will run the private company:
The persons who immediately before the first transfer day are the chairman, the deputy chairman and other members of the Port Authority shall become respectively the chairman, the deputy chairman and other members of the Trust and shall, subject to the provision of this Act, continue in office until the Trust is dissolved by virtue of section 15 … of this Act.
Some people might think, "Nice work if you can get it." One day it is a public body with people appointed either by the Secretary of State or local authorities and others, and the next day they are the office bearers of a substantial private company which owns the assets that go with the River Clyde.
Opposition Members are not satisfied that the justification for the Bill lies in the restrictive powers that are alleged to exist under the present Act. If that is the case and if the powers of the Clyde port authority are so restricted that it cannot carry out work that it thinks is necessary, let it demonstrate that in the court of public opinion in succeeding months. As my hon. Friend the Member for Greenock and Port Glasgow said at the outset, we are going to have another go at the Bill, in the Lords. The authority has plenty of time to make that case and we will base our subsequent actions upon the manner in which it does so.

Mrs. Fyfe: It is surprising that when the hon. Member for Eastwood presented the Bill tonight and referred to the fact that a substantial amount of riparian land is involved and that there was considerable difficulty in developing joint ventures on riverside sites, at no time did he—or any of his hon. Friends—attempt to describe the benefits that could result. We are being asked to write a blank cheque tonight.

Mr. Wilson: I agree with my hon. Friend. I was astonished that the case was made so thinly. Practical examples probably could have been quoted to demon-strate how the extended powers could be used. The manner in which the hon. Member for Eastwood and the people who briefed him approached the debate shows that they did not feel that they had been called upon to give the House examples of how such extended powers could be used to their advantage. The hon. Member for Eastwood did not offer one example.
My hon. Friend the Member for Clydebank and Milngavie tried generously, to encourage the hon. Member for Eastwood into an intervention. Perhaps he could give me a practical example now of something that has not been done if the authority had new powers. I would be pleased to hear a specific example.
Frankly, if the hon. Member for Eastwood sits there and cannot offer the House one example of what the Bill will achieve in practical terms, the House will make its own judgment.
My hon. Friend the Member for Greenock and Port Glasgow spoke ably about the local considerations in his constituency. He reminded us that we are not talking about an abstract or turning one sort of company into another, but about the life-blood of the community—the docks and the waterfront in Greenock. He also properly reminded us that it is Sir John Shaw Stewart's gift to the people of Greenock that is to be passed merrily on from one hand to the next without any regard to original intent. I find it rather odd that a party that is pleased to harp back

to philanthropy by public-spirited citizens in bygone ages casts it all aside when it suits its commercial purpose in the present age. Sir John Shaw Stewart's gift is of no interest or relevance because the Conservative party has an immediate commercial purpose to fulfil.
My hon. Friend the Member for Greenock and Port Glasgow and other hon. Members dealt fully with dredging, which is one of the most important aspects of the Bill. We are not passing comment on the people to whom the Clyde port authority will pass in the short term. I have no doubt that the people who have been running the Clyde port authority for the past two or three decades and whose life's work has been tied up with the Clyde will not, on the day that the authority becomes a private company, abandon responsibility for dredging the river.
We are not talking about that. We are talking about what might happen in one, two or three decades when they and we will have passed on. There is nothing in the Bill to stop the Clyde Port Authority plc being handed on to other concerns. With the way that riverside development is progressing not only in Britain but throughout the world, dealing more with property and less with waterways, what will a future company that owns the interests think about the responsibility to spend large sums of money every year dredging a river which, because of these policies, may by then be used even less than it is now?
A legal obligation to maintain dredging should be written into the Bill. As has been shown during the debate, those hon. Members who have spoken in favour of the Bill are under a misapprehension. There is no such obligation. As my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) said, the word "may" is crucial. If a company's first commitment is to keeping the waterway alive and flourishing, it will do it. However, if its first commitment is to property development, with the traffic on the Clyde and the shipbuilding industry being only a secondary concern, it will have no obligation under the Bill to maintain the dredging of the Clyde. Without that obligation, what will be the consequences for the Clyde?
There is no constituency in Scotland more affected by the matters that we have been discussing than that of Govan in Glasgow. The people of Govan will be grateful to my hon. Friend the Member for Greenock and Port Glasgow for having spoken so eloquently on their behalf. He spoke also for the Kvaerner shipyard and about the crucial issues relating to the Govan constituency.

Mr. Foulkes: Why did my hon. Friend have to do that?

Mr. Wilson: I am astonished that the hon. Member for Glasgow, Govan (Mr. Sillars) is not here. We can only speculate on where he may be——

Mr. Foulkes: Shopping?

Mr. Wilson: I think that Marks and Spencer closes early on a Monday night. Of course, the hon. Gentleman could be sharpening the knives for the Scottish National party leadership contest. For all I know, he could be polishing his cromag in anticipation of Bannockburn day.

Mr. Worthington: I am sorry that the hon. Member for Glasgow, Govan (Mr. Sillars) is not here, especially as his constituency and other constituencies have already been affected by the withdrawal of dredging operations between the Victoria and Glasgow bridges, which ceased about a quarter of a century ago. We can now see the extensive


mudbanks in those locations. That that will be repeated lower down the river in the hon. Gentleman's constituency unless dredging continues was established in a report, commissioned by the regional council and others into the consequences of abandoning dredging, carried out by Babtie Shaw and Morton.

Mr. Wilson: My hon. Friend makes his point well. My hon. Friends the Members for Greenock and Port Glasgow and for Cunninghame, South (Mr. Lambie), who referred to the implications for shipyards, were not talking for narrow constituency interests. If anything, their constituency interests would be served by the upper Clyde becoming silted up.

Dr. Godman: There is a direct Greenock and Port Glasgow constituency interest in the Kvaerner shipyard at Govan. At this very moment, the men and women at Clark Kincaid in Greenock are building two engines for liquid petroleum gas carriers being built at Govan. If Kvaerner, with the support of the hon. Member for Glasgow, Govan (Mr. Sillars), obtains the order for three new vessels, it is extremely likely that Kincaid will build the engines.

Mr. Wilson: My hon. Friend provides an additional item of interesting information, emphasising the point that we in the Labour party speak together for all parts of the Clyde and do not seek to distinguish between one part and another.
Clearly, the dredging issue is of prime importance, and the least that we are entitled to ask for is that it should be a matter for public debate. I am disappointed that we have not heard more from some of the bodies that should have been briefing Opposition Members.

Mrs. Fyfe: Does my hon. Friend share my concern that when the cost of dredging has been raised in the debate, there has been no response from the Government Benches? My hon. Friends and I have expressed concern that although the new body may continue dredging, it is not known at what price to Govan shipyard in particular and to the local authorities.

Mr. Wilson: My hon. Friend's point is well made. We are not discussing a hypothetical matter that might arise at some future date. We know from our own discussions with the Clyde port authority that, even under the present arrangement, the sharing of dredging costs is a live issue. The shipyards must be persuaded that they have to meet the present level of cost.
I am pleased to acknowledge that Clyde port authority in its present form is fully committed to maintaining dredging and the marine use of the river. The hon. Member for Eastwood failed to address the question of what the situation will be when that authority no longer exists and its place taken by a plc whose prime interest is property development rather than the marine uses of the Clyde.

Mr. Lambie: If Clyde Port Authority plc becomes a land and property development speculator, would it not be in the interests of my hon. Friend and myself, as Members of Parliament representing Cunninghame, to see the ports of Hunterston and Ardrossan separated from the new company?

Mr. Wilson: I intended to refer to that matter later, but I shall do so now. My hon. Friend makes an interesting proposition. Long before I entered the House, I had a high regard for my hon. Friend the Member for Cunninghame, South, and for his knowledge of and views on Hunterston. I am sure that my hon. Friend agrees that the economic problems confronting north Ayrshire arise from the fact that the opportunity was never taken to develop Hunterston as it might be. It is ironic that the preface to the port authority's annual report makes reference to Hunterston as
deep-water port facilities which are among the finest of their kind in Western Europe.
I cannot help wondering where else in western Europe one would go to find other fine deep water facilities and at the same time discover such economic underdevelopment of their potential.
The same is true of Ardrossan. I am grateful for the £800,000 of development that has recently taken place there, and congratulate Clyde port authority on it. However, neither my hon. Friend for Cunninghame, South nor myself can ignore the years of neglect at Ardrossan and the steady rundown not only of cargo traffic but the various ferry services that used to run out of that port. I am conscious of the fact that, when new services are contemplated today, it seems to be Troon and Ayr that receive prominent mention as possible future ports for development. I hope that the new development at Ardrossan signals a more positive attitude towards it by the Clyde port authority, in whatever form. Cunninghame district council is examining the Bill and it would be interested in the possibility of Hunterston or Ardrossan opting out. It should be allowed to put forward its views. I want to encourage that kind of public debate.
We are all in favour of employee share ownership plans. However, the hon. Member for Eastwood knows as well as I do that there are ESOPs and ESOPs. In fact, there are ESOPs and fables. We see that in the bus context of Clydeside Wester, where there are two rival buy-outs. In the one case there would be genuine worker ownership; in the other, there would arguably be much less worker ownership.
This is an enabling Bill. It enables shares to be distributed unevenly. After the Bill is passed we shall probably find that a small number of people own a substantial proportion of the shares in the new Clyde Port Authority plc. We are entitled to a public debate. If it serves no other purpose, I hope that this debate, by means of the publicity that it attracts, will lead to public attention being focused on the Bill. That is long overdue. I do not doubt that, if the Bill had been introduced as a Government measure, it would have attracted far more public attention than it has received in its present guise. As it is a private Bill, it has so far crept through by stealth.
Most of those who will be directly affected by its provisions are worried about the Bill. The troops have probably been pulled in so that the hon. Member for Eastwood will obtain his 100 votes. Hon. Members have just come into the Chamber who were not here earlier. They would have a hard job trying to pinpoint the Clyde on a map of Britain, but they will vote for the Bill. Therefore, the hon. Member for Eastwood will gain a pyrrhic victory. The debate has served to highlight the questions of ownership and dredging. The hon. Member


for Eastwood has been unable to answer them, but they will not go away. They will be asked increasingly in public as well as in private.

Mr. Worthington: Another issue that has not been fully explored is that of flooding and what will happen if dredging ceases. Is my hon. Friend aware that, according to the survey, the minimum level by which the height of the Clyde will rise if dredging ceases is 1 m?

Mr. Wilson: My hon. Friend has referred to another important issue. It may not seem important to hon. Members in 1990. However, it may be very important to those who live on the banks of the Clyde in the year 2020. That issue will also receive a public airing. Before the measure goes to another place I am sure that public interest in the Bill will have greatly increased.

Mr. Harry Ewing: On a point of order, Mr. Deputy Speaker. You have been in the Chair for a considerable time. I have listened to the debate throughout the entire time that you have occupied the Chair and I listened to it for a considerable period when your predecessor was in the Chair. As I have listened to the debate, I have become more and more concerned——

Mr. Deputy Speaker (Sir Paul Dean): Order. What is the point of order?

Mr. Ewing: The point of order is that we have in our possession a House of Commons document. If certain hon. Members do not have it, it is available in the Vote Office. I make no complaint about that. However, the House of Commons document refers to——

Mr. Deputy Speaker: Order. That is a matter for debate.

Mr. Allan Stewart: rose in his place and claimed to move, That the Question be now put.

Mr. Harry Ewing: On a point of order, Mr. Deputy Speaker.

Mr. Stewart: I beg to move, That the Question be now put.

Question put, That the Question be now put.

The House proceeded to a Division——

Mr. Ewing (seated and covered): On a point of order, Mr. Deputy Speaker——

Mr. Deputy Speaker: I see that they have now put the Tellers in.

The House divided: Ayes 164, Noes 38.

Division No. 205]
[9.59 pm


AYES


Alexander, Richard
Brazier, Julian


Amess, David
Bright, Graham


Arbuthnot, James
Brown, Michael (Brigg &amp; Cl't's)


Arnold, Jacques (Gravesham)
Bruce, Ian (Dorset South)


Aspinwall, Jack
Buchanan-Smith, Rt Hon Alick


Atkinson, David
Buck, Sir Antony


Baker, Nicholas (Dorset N)
Budgen, Nicholas


Beith, A. J.
Burt, Alistair


Benyon, W.
Butcher, John


Blackburn, Dr John G.
Butterfill, John


Boswell, Tim
Campbell, Menzies (Fife NE)


Bottomley, Mrs Virginia
Carlisle, Kenneth (Lincoln)


Bowden, A (Brighton K'pto'n)
Carrington, Matthew


Bowden, Gerald (Dulwich)
Chapman, Sydney


Bowis, John
Chope, Christopher


Braine, Rt Hon Sir Bernard
Clark, Hon Alan (Plym'th S'n)





Clark, Dr Michael (Rochford)
MacGregor, Rt Hon John


Clark, Sir W. (Croydon S)
Maclean, David


Clarke, Rt Hon K. (FSushcliffe)
McLoughlin, Patrick


Colvin, Michael
Mans, Keith


Coombs, Simon (Swindon)
Marshall, John (Hendon S)


Cormack, Patrick
Marshall, Michael (Arundel)


Currie, Mrs Edwina
Maude, Hon Francis


Davis, David (Boothferry)
Mayhew, Rt Hon Sir Patrick


Day, Stephen
Miller, Sir Hal


Dorrell, Stephen
Moate, Roger


Douglas-Hamilton, Lord James
Monro, Sir Hector


Dunn, Bob
Morrison, Sir Charles


Durant, Tony
Morrison, Rt Hon P (Chester)


Dykes, Hugh
Moss, Malcolm


Eggar, Tim
Moynihan, Hon Colin


Fairbairn, Sir Nicholas
Neale, Gerrard


Fallon, Michael
Neubert, Michael


Favell, Tony
Nicholls, Patrick


Fearn, Ronald
Norris, Steve


Fenner, Dame Peggy
Page, Richard


Field, Barry (Isle of Wight)
Paice, James


Fishburn, John Dudley
Patnick, Irvine


Forman, Nigel
Peacock, Mrs Elizabeth


Forsyth, Michael (Stirling)
Porter, David (Waveney)


Forth, Eric
Rathbone, Tim


Fox, Sir Marcus
Ronton, Rt Hon Tim


Franks, Cecil
Rhodes James, Robert


Freeman, Roger
Riddick, Graham


Garel-Jones, Tristan
Rifkind, Rt Hon Malcolm


Gill, Christopher
Sackville, Hon Tom


Goodlad, Alastair
Sainsbury, Hon Tim


Gorman, Mrs Teresa
Scott, Rt Hon Nicholas


Grant, Sir Anthony (CambsSW)
Shaw, David (Dover)


Greenway, Harry (Ealing N)
Shaw, Sir Giles (Pudsey)


Greenway, John (Ryedale)
Shaw, Sir Michael (Scarb')


Gregory, Conal
Shephard, Mrs G. (Norfolk SW)


Ground, Patrick
Shepherd, Colin (Hereford)


Grylls, Michael
Shersby, Michael


Gummer, Rt Hon John Selwyn
Skeet, Sir Trevor


Hamilton, Hon Archie (Epsom)
Speed, Keith


Hargreaves, Ken (Hyndburn)
Stanley, Rt Hon Sir John


Harris, David
Steel, Rt Hon Sir David


Hawkins, Christopher
Steen, Anthony


Hayward, Robert
Stern, Michael


Heathcoat-Amory, David
Stevens, Lewis


Howarth, Alan (Strat'd-on-A)
Stewart, Allan (Eastwood)


Howarth, G. (Cannock &amp; B'wd)
Stewart, Andy (Sherwood)


Howe, Rt Hon Sir Geoffrey
Stewart, Rt Hon Ian (Herts N)


Howell, Ralph (North Norfolk)
Stradling Thomas, Sir John


Hughes, Robert G. (Harrow W)
Summerson, Hugo


Irvine, Michael
Tebbit, Rt Hon Norman


Jack, Michael
Thompson, D. (Calder Valley)


Janman, Tim
Thompson, Patrick (Norwich N)


Jessel, Toby
Thorne, Neil


King, Roger (B'ham N'thfield)
Thurnham, Peter


Kirkwood, Archy
Twinn, Dr Ian


Knapman, Roger
Walden, George


Knowles, Michael
Walker, Bill (T'side North)


Lang, Ian
Waller, Gary


Lawrence, Ivan
Ward, John


Leigh, Edward (Gainsbor'gh)
Wardle, Charles (Bexhill)


Lennox-Boyd, Hon Mark
Wells, Bowen


Lightbown, David
Widdecombe, Ann


Lilley, Peter
Winterton, Mrs Ann


Lloyd, Peter (Fareham)



Luce, Rt Hon Richard
Tellers for the Ayes:


Lyell, Rt Hon Sir Nicholas
Mr. Richard Holt and


Macfarlane, Sir Neil
Mr. William Hague.




NOES


Banks, Tony (Newham NW)
Foster, Derek


Bermingham, Gerald
Foulkes, George


Boateng, Paul
Fraser, John


Callaghan, Jim
Fyfe, Maria


Cox, Tom
Godman, Dr Norman A.


Dalyell, Tarn
Golding, Mrs Llin


Davies, Rt Hon Denzil (Llanelli)
Haynes, Frank


Dixon, Don
Heal, Mrs Sylvia


Eastham, Ken
Hughes, John (Coventry NE)


Ewing, Harry (Falkirk E)
Jones, Barry (Alyn &amp; Deeside)






Kaufman, Rt Hon Gerald
Skinner, Dennis


Lambie, David
Spearing, Nigel


McFall, John
Turner, Dennis


McKay, Allen (Barnsley West)
Watson, Mike (Glasgow, C)


Mahon, Mrs Alice
Wilson, Brian


Maxton, John
Worthington, Tony


Michael, Alun
Wray, Jimmy


Mullin, Chris



Pike, Peter L.
Tellers for the Noes:


Powell, Ray (Ogmore)
Mr. Max Madden and


Prescott, John
Mr. Harry Barnes.

Question accordingly agreed to.

Question put accordingly, That the Bill be now read a Second time:—

Mr. Ewing:: On a point of order, Mr. Deputy Speaker.

The House divided: Ayes 145, Noes 37.

Division No. 206]
[10.11 pm


AYES


Alexander, Richard
Greenway, Harry (Ealing N)


Amess, David
Gregory, Conal


Arbuthnot, James
Ground, Patrick


Arnold, Jacques (Gravesham)
Grylls, Michael


Aspinwall, Jack
Gummer, Rt Hon John Selwyn


Baker, Nicholas (Dorset N)
Hargreaves, Ken (Hyndburn)


Beith, A. J.
Harris, David


Blackburn, Dr John G.
Hawkins, Christopher


Boswell, Tim
Hayward, Robert


Bottomley, Mrs Virginia
Heathcoat-Amory, David


Bowden, A (Brighton K'pto'n)
Howarth, Alan (Strat'd-on-A)


Bowden, Gerald (Dulwich)
Howarth, G. (Cannock &amp; B'wd)


Bowis, John
Howe, Rt Hon Sir Geoffrey


Braine, Rt Hon Sir Bernard
Howell, Ralph (North Norfolk)


Brazier, Julian
Hughes, Robert G. (Harrow W)


Bright, Graham
Irvine, Michael


Brown, Michael (Brigg &amp; Cl't's)
Jack, Michael


Bruce, Ian (Dorset South)
Janman, Tim


Buchanan-Smith, Rt Hon Alick
Jessel, Toby


Buck, Sir Antony
King, Roger (B'ham N'thfield)


Budgen, Nicholas
Kirkwood, Archy


Burt, Alistair
Knapman, Roger


Butcher, John
Knowles, Michael


Butterfill, John
Lang, Ian


Campbell, Menzies (Fife NE)
Lawrence, Ivan


Carrington, Matthew
Leigh, Edward (Gainsbor'gh)


Chope, Christopher
Lennox-Boyd, Hon Mark


Clark, Hon Alan (Plym'th S'n)
Lilley, Peter


Clark, Dr Michael (Rochford)
Lloyd, Peter (Fareham)


Clark, Sir W. (Croydon S)
Luce, Rt Hon Richard


Clarke, Rt Hon K. (Rushcliffe)
Lyell, Rt Hon Sir Nicholas


Colvin, Michael
Macfarlane, Sir Neil


Coombs, Simon (Swindon)
MacGregor, Rt Hon John


Cormack, Patrick
Maclean, David


Currie, Mrs Edwina
Maclennan, Robert


Davis, David (Boothferry)
McLoughlin, Patrick


Day, Stephen
Mans, Keith


Dorrell, Stephen
Marshall, John (Hendon S)


Douglas-Hamilton, Lord James
Maude, Hon Francis


Dunn, Bob
Mayhew, Rt Hon Sir Patrick


Durant, Tony
Miller, Sir Hal


Dykes, Hugh
Moate, Roger


Eggar, Tim
Monro, Sir Hector


Fairbairn, Sir Nicholas
Morrison, Sir Charles


Favell, Tony
Moss, Malcolm


Fearn, Ronald
Moynihan, Hon Colin


Fenner, Dame Peggy
Neubert, Michael


Field, Barry (Isle of Wight)
Nicholls, Patrick


Fishburn, John Dudley
Norris, Steve


Forman, Nigel
Page, Richard


Forsyth, Michael (Stirling)
Paice, James


Forth, Eric
Peacock, Mrs Elizabeth


Fox, Sir Marcus
Porter, David (Waveney)


Franks, Cecil
Renton, Rt Hon Tim


Freeman, Roger
Rhodes James, Robert


Gill, Christopher
Riddick, Graham


Gorman, Mrs Teresa
Rifkind, Rt Hon Malcolm


Grant, Sir Anthony (CambsSW)
Sainsbury, Hon Tim





Shaw, David (Dover)
Thompson, D. (Calder Valley)


Shaw, Sir Giles (Pudsey)
Thompson, Patrick (Norwich N)


Shaw, Sir Michael (Scarb')
Thorne, Neil


Shepherd, Colin (Hereford)
Thurnham, Peter


Shersby, Michael
Twinn, Dr Ian


Skeet, Sir Trevor
Walker, Bill (T'side North)


Stanley, Rt Hon Sir John
Waller, Gary


Steel, Rt Hon Sir David
Ward, John


Steen, Anthony
Wardle, Charles (Bexhill)


Stern, Michael
Wells, Bowen


Stevens, Lewis
Widdecombe, Ann


Stewart, Allan (Eastwood)
Winterton, Mrs Ann


Stewart, Andy (Sherwood)



Stewart, Rt Hon Ian (Herts N)
Tellers for the Ayes:


Stradling Thomas, Sir John
Mr. William Hague and


Summerson, Hugo
Mr. Richard Holt.


Tebbit, Rt Hon Norman





NOES


Banks, Tony (Newham NW)
McKay, Allen (Barnsley West)


Boateng, Paul
Madden, Max


Callaghan, Jim
Mahon, Mrs Alice


Dalyell, Tarn
Maxton, John


Davies, Rt Hon Denzil (Llanelli)
Michael, Alun


Dixon, Don
Mullin, Chris


Eastham, Ken
Pike, Peter L.


Ewing, Harry (Falkirk E)
Powell, Ray (Ogmore)


Foster, Derek
Prescott, John


Foulkes, George
Skinner, Dennis


Fraser, John
Spearing, Nigel


Fyfe, Maria
Turner, Dennis


Godman, Dr Norman A.
Watson, Mike (Glasgow, C)


Golding, Mrs Llin
Wilson, Brian


Haynes, Frank
Worthington, Tony


Heal, Mrs Sylvia
Wray, Jimmy


Hughes, John (Coventry NE)



Jones, Barry (Alyn &amp; Deeside)
Tellers for the Noes:


Kaufman, Rt Hon Gerald
Mr. Tom Cox and


Lambie, David
Mr. Harry Barnes.


McFall, John

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Pakistan Bill [Lords], the Town and Country Planning Bill [Lords], the Planning (Listed Buildings and Conservation Areas) Bill [Lords], the Planning (Consequential Provisions) Bill [Lords] and the Planning (Hazardous Substances) Bill [Lords] may be proceeded with, though opposed, unitl any hour.—[Mr. Sainsbury.]

Mr. Harry Ewing: On a point of order, Mr. Deputy Speaker. You will have had plenty of time to think about my point of order because it is perfectly obvious. Can you, Mr. Deputy Speaker, as an occupant of the Chair, give me one example during all your time in Parliament and all your time as Mr. Deputy Speaker when you accepted a point of order in the middle of another point of order? When you have answered that, I shall raise another point of order.

Mr. Deputy Speaker: I have dealt with the hon. Gentleman's point of order. I remind him and the House that a point of order relating to a closure invariably takes precedence over anything else.

Mr. Ewing: You seem to make up the rules as you go along, Mr. Deputy Speaker—[HON. MEMBERS: "Oh."] That has never happened before and it is totally unacceptable. I want to put ocord my anger and


disgust at the conduct of the Chair during the debate. I am very serious about this. Normally it is the occupant of the Chair who asks an hon. Member to retire from the House because of his or her conduct. I am leaving the House now in protest about the conduct of the Chair.

Mr. Deputy Speaker: The matter that I have explained to the House is clear and it is of very long standing: a point of order relating to a closure invariably takes precedence.

Mr. Dennis Skinner: Further to that point of order, Mr. Deputy Speaker. Would it be fair to say that when an hon. Member moves a closure, that is a motion for a closure? If the hon. Member concerned raises a point of order, he places the Chair in the position of trying to take one point of order over another. Am I right in saying that all that the hon. Member had to do—which probably was not done in this case—was to move,
That the Question be now put."?
Is not it wrong in principle, according to Standing Orders, for an hon. Member to rise on a point of order during another point of order? Would not it be better if the hon. Member concerned moved the closure as such, rather than on a point of order, so that you, Mr. Deputy Speaker, could resolve the matter?

Mr. Deputy Speaker: The hon. Gentleman is absolutely right. There is no need for an hon. Member to say, "On a point of order," before the closure is moved. The hon. Gentleman is absolutely right about the procedure of which he has reminded the House.

Mr. Don Dixon: Further to that point of order, Mr. Deputy Speaker. Had you any indication from the sponsor of the Bill that he intended to move the closure, bearing in mind the fact that many of my hon. Friends still wanted to participate in the debate?

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman is not disputing the judgment of the Chair. If a closure motion is moved, the Chair has to decide whether to accept it. It is then for the House to decide on the matter. All that the Chair has to decide is whether to accept the motion.

Mrs. Alice Mahon: On a point of order. Mr. Deputy Speaker. I have just heard a press report that the IRA has accepted responsibility for the bombing of an Army recruitment office in Halifax some weeks ago. As there has been silence from all quarters about who is responsible for that outrage, which could have resulted in civilian deaths, but fortunately did not, I am wondering whether you have been notified by the Secretary of State for Northern Ireland that he intends to make a statement in the near future about the bombing and responsibility for it.

Mr. Deputy Speaker: The hon. Lady has raised a serious point. It is not possible for a statement to be made now, but I am sure that what she has said has been heard by the Government Front Bench.

Orders of the Day — Pakistan Bill [Lords]

Order for Second Reading read.

The Parliamentary Under-Secondary of State for Foreign and Commonwealth Affairs (Mr. Tim Sainsbury): I beg to move, That the Bill be now read a Second time.
The Bill's purpose is, I hope, welcome. It is to modify existing domestic legislation in order to place Pakistan on the same footing as other Commonwealth countries, following its return to the Commonwealth on 1 October of last year, after a decision by consensus of the other member countries, of the Commonwealth.
As became clear during discussion of the Bill in the other place last year, it also provides a reminder of the close relations between our two countries, and of the very considerable amount of good will towards Pakistan that exists in Britain. The relations between us are, of course, of long standing, but they are by no means purely historical. Pakistan is an important trading partner for Britain, and we are the largest overseas investor there. We have a major aid programme, with projects in irrigation and the social sector, among other areas. We consult and co-operate with Pakistan on a wide range of issues. The Pakistan Interior Minister was one of those who visited London for the world ministerial drugs summit held here at the beginning of April.
Pakistan is a major Islamic country. We particularly welcome Pakistan's return to the Commonwealth at this important time in the organisation's history. As we proceed with the high level review of the role of the Commonwealth in the 1990s, there will be much discussion between the secretariat and other members of the Commonwealth. We look forward to Pakistan's contribution to these discussions. Its renewed membership of the Commonwealth provides it with an additional and important forum in which to set out and exchange views at a time when developments in the world are taking place at a particularly rapid pace.
The return to democracy in many parts of the world has been one of the most encouraging developments of the last few months. Pakistan was some way ahead of recent events, returning to full democracy with elections in November 1988. We were particularly pleased to be able to welcome Prime Minister Bhutto to London a few months later, in July last year. That very successful visit included talks on many key issues. Mr. Speaker had the opportunity to see the Pakistan parliamentary system when he visited last autumn. since then, we received in January a senior delegation from the Pakistan Senate, headed by its leader, Mr. Sajjad.
One worrying note is the tension which has developed between Pakistan and India over Kashmir. As we have repeatedly made clear to both sides, we very much hope that that tension can be reduced, and that discussions between the two countries can provide some resolution of the situation. Neither country's interests can be served by continuing the dispute which has developed. We welcomed the meeting between the two Foreign Ministers in New


York on 25 April, and their stated intention to keep contacts open at all levels. We shall continue to follow the situation there closely.

Mr. Max Madden: The Minister has been referring to the serious dispute that exists between Pakistan and India over the future of Kashmir. Will he take this opportunity to declare on behalf of the British Government that they recognise that the struggle under way in Kashmir is a genuine struggle for self-determination by the people of Kashmir to determine the destiny of Kashmir? Will he, on behalf of the Government, recognise the status of that independence struggle?

Mr. Sainsbury: As the hon. Gentleman knows, Her Majesty's Government have made their position clear: they remain entirely neutral, seek a peaceful resolution and urge on both countries the avoidance of any force, and maximum restraint. We hope that they will follow the declaration made at Simla in 1972.
To return to the contents of the Bill, it is intended to amend a number of Acts in order to extend to Pakistan the provisions applying to other Commonwealth countries. It deals with Pakistan's relationship with the Commonwealth Institute. It reinstates the right of the Government of Pakistan to appoint a trustee to the board of the imperial war museum. It makes amendments to our legislation relating to the armed forces in order to define the legal status of Pakistan forces when, for example, training in this country. It provides for the exercise of command and discipline when British forces and Commonwealth forces are serving together, and for attachment of members of one force to another. It ensures that arrangements for the reciprocal enforcement of judgments with Pakistan remain in force.
The immigration and electoral implications of Pakistan's renewed membership of the Commonwealth were dealt with separately by an Order in Council made on 2 August last year. That added Pakistan to the list of Commonwealth countries given in schedule 3 to the British Nationality Act 1981. It is a technical Bill. I hope it is a welcome Bill, and I commend it to the House.

Mr. Gerald Kaufman: On behalf of the Labour party I welcome the Bill and offer our support for its passage through the House.
It is almost exactly 17 years since I spoke in the House on the Second Reading of another Pakistan Bill. My hon. Friend the Member for Norwood (Mr. Fraser) is present; he took part in that debate on 22 May, 1973, which dealt with the consequences of Pakistan's decision to withdraw from the Commonwealth. I said then that it was a melancholy day, because we were having to pass legislation to provide for the withdrawal of Pakistan from the Commonwealth. I spoke of bidding farewell to Pakistan as a member of the Commonwealth, temporary though we hoped its departure would be. Having taken part in the debate on Pakistan's withdrawal from the Commonwealth, it gives me great personal satisfaction now to be able to take part in the debate on a Bill dealing with its return.
As the Under-Secretary of State has said, the provisions of the Bill are minor, but their implications are significant

because, during the 17 years since we debated the previous Bill on Pakistan, that country has seen great changes. Democracy was swept aside in a way that caused great regret to those of us who have a great regard for Pakistan. The military rule is now over, and Pakistan has returned to full democracy in an election that gave great hope to all its friends. In electing a Government headed by Benazir Bhutto, Pakistan has dispelled the unfair and inaccurate stereotypes about Muslim attitudes towards woman by placing in office the first woman Head of Government in an Islamic country.
Benazir Bhutto has demonstrated courage, political sophistication and balanced judgment in carrying out her duties as Prime Minister. I hope to see progress in Pakistan for myself when I visit that country in a little over three months. Of course the country has problems. It has had the problem of coping with the influx of refugees from Afghanistan, and the way that it has coped was a remarkable achievement for a country which itself suffers from poverty. It faces a vexed situation in Kashmir. I hope to visit Kashmir when I get to Pakistan later this year. I trust that the Kashmir issue will be dealt with in a peaceful manner and that the solution will be acceptable to all the parties that are involved.
Conflict between two countries such as Pakistan and India would be viewed with horror in the House, especially in the Labour party, which was able to bring about independence for both Pakistan and India. We were particularly happy that both India and Bangladesh sponsored Pakistan's return to the Commonwealth.
Pakistan has problems of development. I was pleased to hear what the Under-Secretary of State had to say about British overseas aid for Pakistan. I hope that it will be possible to increase it, and that the framework of the Bill will make that possible. From a previous visit there, I know of the vigour and drive with which Pakistan and its citizens can take advantage of opportunities for progress. I know that from contacts with my constituents of Pakistani origin. In my constituency, I have the privilege of representing people who originated from many lands in addition to those whose origins as Mancunians and I had better add as Gortonians—you, Mr. Deputy Speaker, will know the significance of not including Gortonians necessarily among Mancunians—go back through the centuries.
This country has been blessed by successive waves of immigration that go back to the Celts and Saxons. My constituency still has physical evidence of invasion by the Danes. Over the centuries, Manchester has readily received the Huguenots, the Jews—including in my constituency Chaim Weizman, first President of the state of Israel who lived at No. 57 Birchfields road—the Poles, who in Manchester as elsewhere, have just solemnley commemorated the 50th anniversary of the Katyn massacre, Afro-Caribbeans and, among numerous others, immigrants from the Indian sub-continent.
I am proud to represent them all, and I am happy to have built up close links with my constituents of Pakistani origin. I first knew some of them as babies, and they are now adults with babies of their own. Their parents and grandparents are my friends. I attend their weddings and other celebrations. I see the minaret of the mosque, the laying of the foundation stone of which I attended, from my bedroom window. I eat at their restaurants. On Wilmslow road in my constituency, we have more restaurants providing food from Pakistan, India and


Bangladesh than can be found in any area of similar size, not only in Britain but, I am willing to bet, anywhere in Pakistan.
Pakistanis in Manchester reflect the fine traditions of the country from which they come. They work hard, they seek to give their children an excellent education and a good start in life, they respect their elders and they believe in a sound family life. They observe their religion and they celebrate Pakistan day and the birth of the prophet Mohammed. They watch Imran Khan play cricket at Old Trafford, and they are good Britains, loyal to this country while cherishing their land of origin.
I know that Pakistan's departure from the Commonwealth caused those people pain, and I know that its return causes them to rejoice. Many of them took British nationality and many took advantage of the right to possess dual nationality. Those who did not acquire United Kingdom nationality will now have the vote in Britain as Commonwealth citizens. As the Parliamentary Under-Secretary has said, that has already been provided for by Order in Council.
The Minister also spoke of the immigration implications of the Bill. I hope that the Government will think again about the way in which they administer the immigration rules. All of us who have constituents originating from Pakistan with relatives, spouses or

would-be spouses there, know that they are often put through heart-rending ordeals because of the operation of the primary purpose rule, which separates families.
Pakistan is already playing an active part in the Commonwealth. Benazir Bhutto attended the Commonwealth Heads of Government meeting in Kuala Lumpur in October, and she provided a valuable reinforcement to those at Kuala Lumpur and elsewhere who have argued in favour of sanctions against South Africa and demanded the dismantling of apartheid in that country. I am sure that Benazir Bhutto and the rest of her Government will play a continuing and constructive role in the work of the Commonwealth.
In October, at our party conference, I had great pleasure in welcoming a new addition to the diplomatic corps represented there, the excellent high commissioner for Pakistan. Until 1 October, he had previously been known to us all as the ambassador of Pakistan. The transformation was not simply in a title but in a whole relationship.
The United Kingdom and Pakistan have always been good friends. Now, once again, we are colleagues in a unique international partnership. That transformation is good news. The Bill is good news and I welcome it whole-heartedly.

Mr. Neil Thorne: I have great pleasure in welcoming the Bill. It was a sad day in 1972 when Pakistan decided to leave the Commonwealth. I am sure that both sides of the House will agree about that and I am certain in retrospect that most Pakistanis will agree that it was the wrong thing to do at that time.
It was a great pleasure to find democracy restored to Pakistan in 1988. Those of us who know and love that part of the world thoroughly welcomed that change. It was therefore a memorable and special occasion when, in 1989, Pakistan was invited to return to the Commonwealth.
The visit of Miss Bhutto to this country in July of last year was a great success. It was heartening to find so many people in this country, not only those of Pakistani extraction, who welcomed her as a symbol of the new democracy now in that country. The expansion of free speech through the media, the trade unions and other channels must be welcomed by any true democrat, and all hon. Members now have the opportunity to express their pleasure at this development.
We have had a special relationship and an interest in that part of the world for a long time, which is why we are the major overseas investor in Pakistan, and the fourth largest trader. That is of special significance.
As has been said, we have a £25 million a year aid programme and we can expect that to be reviewed and improved now that democracy has been restored and so many other aspects of life are moving in the right direction.
A great deal of help and encouragement could be given, for example with literacy. The population of Pakistan has more than doubled since British rule of the sub-continent ceased, but the percentage of the population that is literate has declined. That is why it is so important for us to help encourage literacy.
Pakistan has a role to play within the Islamic community. As a key to stability among Islamic countries it is important, because it will help us to bridge many gaps. We can take advantage of our close relationship with Pakistan to make the introductions that are so important in the Islamic world. The fact that we can do so and that we hope to be able to enhance those relationships is encouraging.
We must all admire the fantastic job that Pakistan has done in looking after 3 million Afghan refugees. Hon. Members who have had the opportunity to visit the Afghan refugee camps will appreciate exactly how much has been done. They have assistance from the United Nations, but that covered only about half of the cost; the other half has been borne by the Pakistani people. Their hospitality to the neighbouring Afghans has been extraordinary and an example to the rest of the world of how to help others at a time of need.
We have all been exceptionally lucky in the high commissioner who was chosen to come to this country, Shaharyar Khan. He arrived here as an ambassador and has now become the high commissioner. It is a sign of Pakistan's maturity that a change was not made when democracy was introduced. The present Government accepted the ambassador who had previously been appointed because he is a highly competent and professional career diplomat and not a politician. In that capacity he has helped enormously to cement and enhance

our relationship with Pakistan. I hope that he will remain with us for a long time and that eventually he is replaced by someone of equally high calibre. He is a great example of the sort of high commissioner whom we like to have in London, and he has made many positive contributions to the Pakistani community in this country and to alleviating its problems.
To my knowledge the high commissioner has conducted several advice bureaux in different parts of the country. He has been to my constituency, among others, to give the local Pakistani population an opportunity to make representations directly through him. That is unusual, and I do not know of any other high commissioner or ambassador who has provided such a service for people originating from overseas.
I wish finally to say a word about the major problem on the horizon—Kashmir. I am sure that Pakistan is determined that war will not be a consequence of this disagreement. However, it has a right to expect the matter to be resolved, and sooner rather than later. It is now more than 40 years since a United Nations resolution was passed, that there should be a plebiscite or referendum as a means of consulting the people of Kashmir on their future. The longer that this question is left, the more difficult it becomes because there will then be demands for independence, rather than a decision to join one country or the other.
Independence for Kashmir could cause weakness, whereas expressing a sincere and genuine choice to join one or the other of those countries must be a stronger answer. The people of Kashmir have as much right as others in the world to self-determination. That right has now spread to areas of Europe where, a year ago, we would not have thought it possible. Last year was especially momentous for people in eastern Europe as they achieved the right to self-determination——

Mr. Deputy Speaker (Mr. Harold Walker): Order. I have allowed a wide debate, but I must be cautious about allowing it to turn into one about the right of independence for Kashmir.

Mr. Thorne: We wish Pakistan every success in overcoming its problems. She deserves not only our support but that of other countries and of the United Nations. I hope that the legislation is allowed to proceed to the statute book as quickly as possible.

Sir David Steel: In rising briefly to help to give all-party support to this measure, my brevity should not be taken as lacking in any way in sincerity or full support. I simply do not wish to go down the highways and byways of the excellent Pakistani restaurants in my constituency, although in the south of Scotland they are exceeded in number by the excellent Pakistani corner shops, which are much appreciated in the border towns.
It is welcome in all quarters of the House that Pakistan has returned to the Commonwealth. I agree with hon. Members that it would be a positive sign of good will by the British Government, which would be widely supported in the House, if our overseas aid programme to Pakistan were to be increased as a positive mark of recognition of


that return to democracy. I am thinking especially of the crying need for additional help in the areas of health and welfare.
It was a delight to welcome Benazir Bhutto as the elected Head of Government, whom many of us knew in her days as a student politician in exile in this country. She is a serene leader—indeed, she has a degree of serenity that she might convey to other women Prime Ministers. I was pleased to meet her, together with the leader of my party, during her visit to London. I echo what other hon. Members have said about the splendid high commissioner for Pakistan.
Without wishing to try your patience, Mr. Deputy Speaker, on the subject of Kashmir, I shall say only that I very much wish that the fact that Pakistan has returned to the Commonwealth will, of itself, provide a forum in which the difficult tensions in Kashmir can be mitigated. It would surely be unthinkable that two Commonwealth partners should go to war again over that issue. In welcoming Pakistan's return to membership of the Commonwealth, with all the technical adjustments that the Bail makes, let us hope that we are doing something purposeful in averting what could be another tragedy.

Mr. Gary Waller: I join other right hon. and hon. Members in welcoming the Bill, representing as it does the return of Pakistan to the Commonwealth—a development that many of us awaited with keen anticipation for a long time, and one that we greet with pleasure.
We welcome the return of democracy to Pakistan, recognising that it is not yet firmly established in the soil of that country but is a flower that we want to grow and flourish in the future.
Those right hon. and hon. Members who had the pleasure of meeting Prime Minister Bhutto when she visited Britain last year will recall the great impression that she made when she gave a speech in this building and at other locations. We recognised her great commitment to a democratic Pakistan.
Pakistan has enormous problems of law and order and with its economy. Many would like a return to military rule there, but those who saw in Benazir Bhutto qualities that we certainly recognise in this House hope that she will go on to fulfil the hopes of so many for the reforms to which she is committed. Progress has been slow during the past 18 months—as was bound to be the case—and there is a long way to go. However, all those who recognise the gradual improvement in relations between Britain and Pakistan will wish Benazir Bhutto well in her efforts to proceed with the support of her people.
One must acknowledge the significant part played by many people of Pakistani origin in the life of this country. The right hon. Member for Manchester, Gorton (Mr. Kaufman) spoke of the excellent activities of Pakistanis in Manchester. As one who was born in Yorkshire, and bearing in mind the great importance of cricket in the life of that county, I only hope that in future it will be possible for Yorkshire to win one or two battles of the roses with the help of players of Pakistan origin who were born in Yorkshire. I am sure that you, Mr. Deputy Speaker, will concur with that sentiment.
I echo the remarks of right hon. and hon. Members in all parts of the House on the extent of our good fortune in

respect of the high commissioner for Pakistan at the Court of St. James. In the time that we have known Mr. Shaharyar Khan, we have come to realise not only the high esteem in which he is held by Pakistani communities throughout the country but that his work with the British-Pakistan parliamentary group has made it one of the strongest in the House. We look forward to Mr. Khan's continued residence in London for some considerable time to come.
The problems of Kashmir certainly present a challenge for Pakistan, and one that we should not underestimate. The commitment that any people have to their nation and to their belief in the right to self-determination should never be underestimated. I firmly believe that the people of Kashmir should be allowed to determine their own future through the plebiscite to which they believed themselves entitled by virtue of the 1948 United Nations resolution. I hope that, sooner or later, it will be implemented—and may that date be sooner, because the sooner it comes the greater the chance of a lasting peace in that region.
This is a great day for Pakistan. It may be a technical development, following the return of Pakistan to the Commonwealth last October. I understand that, when the Bill becomes law, it will be known as the Pakistan Act 1989, and the Bill will be deemed to have come into force on 1 October 1989. Today, therefore, we are giving effect to a development that has already taken place. We extend to the people of Pakistan the hand of friendship and co-operation. Pakistan, a country of 100 million people, has the potential to play its part in leading the world of Islam and the Indian sub-continent and to be a great force for good.

11 pm

Mr. Max Madden: I had the honour of first being elected Member of Parliament for Bradford, West in 1983. A third of my constituents are from the Indian sub-continent, and the vast majority are of Pakistani origin. I pay tribute to the contribution that my constituents of Pakistani origin have made to the economic, social and political life of this country. When Pakistan rejoined the Commonwealth last year, it was a source of great pleasure to my constituents of Pakistani origin.
I should declare an interest. Together with several other hon. Members, I am to receive an award from the President of Pakistan, the Hilal-i-Quaidi-i-Azam award, in recognition of the small contribution that we have made to restoration of democracy and human rights in Pakistan, fulfilled by the election of Prime Minister Bhutto and a democratically elected Government.
As a number of hon. Members have already said, our constituents of Pakistani origin are in many case British citizens. Whether the right hon. Member for Chingford (Mr. Tebbit) likes it or not, they maintain close links with their own country. They will read the report of the debate with care. I regret that this important debate is taking place at such a late hour. It should have taken place much earlier. I regret the inadequate opportunities that are afforded to hon. Members to debate the affairs of the Indian sub-continent in general. This is the first opportunity that we have had for many years to discuss the concerns of our constituents of Pakistani origin and the affairs of Pakistan.

Mr. Deputy Speaker: Order. I am allowing a wide debate to be held on the subject, but I hope that the hon. Gentleman will not overlook the limited nature of the Bill.

Mr. Madden: Indeed not, Mr. Deputy Speaker. However, as other hon. Members were allowed to stray widely, I hope that in an open-ended debate you will not seek to limit the amount of time that is allocated to those who speak later in the debate. That is yet another argument for the debate having been held earlier in the day.
My constituents of Pakistani origin resent the fact that many of their relatives and friends find it very difficult even to visit this country. They are also bitterly angry about the great difficulties they face in being reunited with their families in this country, due largely to delays in the immigration procedures, which are governed by Government rules which we shall debate tomorrow evening.
The latest changes bring further restrictions, delays and difficulties for constituents from overseas who seek to be reunited with their families. Serious administrative problems are still encountered at the British embassy in Islamabad. I am pleased that the Minister who has direct responsibility for that post is with us tonight. I hope that he will make further efforts to improve the administration of the visa section, which is the cause of much anxiety, inconvenience and distress for many hon. Members.
Many of our constituents of Pakistani origin have a great interest in the education of their children. They are ambitious for them and want them to learn, progress and prosper. I am delighted to see the academic achievements of many of our young constituents of Pakistani origin in the state-maintained sector. But I must say, on behalf of my many Muslim constituents, that equity demands that if the Government subsidise voluntary aided schools for Anglicans, Catholics and Jews, they should also subsidise voluntary aided schools for the children of Muslims, Hindus and Sikhs——

Mr. Deputy Speaker: Order. I do not see how these matters can conceivably arise under the Bill before the House.

Mr. Madden: Britain, like the Commonwealth, is a multiracial, multicultural, multi-faith society——

Mr. Deputy speaker: Order. I remind the hon. Gentleman that we are discussing a particular Bill; I very much hope that he will address his remarks more closely to it.

Mr. Madden: We are discussing a Bill, Mr. Deputy Speaker, about Pakistan. On behalf of my constituents of Pakistani origin I want to report to the House, on this rare opportunity to do so, the interests and anxieties of——

Mr. Deputy Speaker: Order. I must tell the hon. Gentleman that I do not share his view about this being the appropriate opportunity to do that. This is not that opportunity.

Mr. Madden: As several hon. Members, not to mention the Minister, have noted, Mr. Deputy Speaker, when Pakistan rejoined the Commonwealth family of nations, a major Islamic country re-entered it. All Muslims are worried about the publication of "The Satanic Verses". As a result of the Bill, Muslims will undoubtedly give voice to their concerns about that book. The Minister rightly said

that the anxieties of Muslims must be recognised, so we must acknowledge that great offence has been caused by the publication of this book. I urge the Minister to acknowledge the difficult situation that has resulted.

Mr. John M. Taylor: From that book or this Bill?

Mr. Madden: The Government Whip is muttering from a sedentary position. If I were not interrupted so often, I would be able to conclude my remarks much sooner.
I have suggested on many occasions that, if Salman Rushdie wants reconciliation and mutual understanding —here, and internationally—he should be encouraged to instruct his publishers not to print more editions——

Mr. Deputy Speaker: Order. If I allowed the hon. Gentleman to make a speech along those lines, I should have no option but to allow other hon. Members to put an alternative point of view about the same matter. We should then find ourselves debating issues that have nothing whatever to do with the Bill.
Let me remind the hon. Gentleman that the explanatory memorandum states:
The purpose of the Bill is to modify certain United Kingdom enactments to take account of the re-admission of Pakistan as a member of the Commonwealth on 1st October 1989.
I cannot see that has any connection with the publication, in this country or elsewhere, of a particular book.

Mr. Madden: This is my last word on the subject, Mr. Deputy Speaker. I hope that, if what I have suggested was done, it would bring about the end of the odious death threats against Mr. Rushdie, which I have continually condemned.

Mr. Deputy Speaker: Order. The hon. Gentleman is ignoring what I have just told him. I very much hope that he will have regard to it; if not, I must ask him to resume his seat.

Mr. Madden: Let me conclude my remarks by referring to a matter that every hon. Member has mentioned so far —the great anxiety about the future of Kashmir, and the consequent tension between India and Pakistan. That tension could result in war. This evening, in a Committee Room of the House—at a meeting attended by a number of hon. Members, some of whom are in the Chamber tonight—the high commissioner for Pakistan confirmed that Pakistan does not want and will not seek, now or at any time in the future, war with India over Kashmir. He said that Pakistan wanted the principle of self-determination to be upheld, and that Pakistan wanted to live in peace with all her neighbours.
I believe that that is an accurate version of Pakistan's position, which Pakistan will take with it into the Commonwealth. I hope very much—a number of hon. Members have said the same—that the Commonwealth and the Government will play a much more active role in seeking a resolution of the dispute over Kashmir than they seem to have done hitherto.
As I have told the Minister in other debates on the issue, I feel that the British Government can no longer maintain a position of neutrality over Kashmir. What is happening there can be seen in Lithuania and other parts of eastern Europe—and, indeed, in a number of other countries. It is a genuine struggle by the people for the right to determine their own destiny and that of their own


country—a struggle for independence. It is wrong to see that struggle, as some hon. Members do, as a choice between remaining part of India and joining Pakistan.
There is a third option: the option of independence——

Mr. Deputy Speaker: Order. The hon. Gentleman heard me reproach the hon. Member for Ilford, South (Mr. Thorne) on this very point. We are not debating whether Kashmir has a right to self-determination. I hope that the hon. Gentleman will not pursue that line.

Mr. Madden: It is extraordinary if an issue which directly affects two Commonwealth countries—Pakistan and India—and which may plunge them and the region into war cannot be raised by me or any other Member in a debate of this sort. I find it——

Mr. Deputy Speaker: Order. The hon. Member will recognise that it is my duty to ensure that the Standing Orders and procedures of the House are observed. We are debating a Bill that is clearly defined. We have had a wide debate, but there are certain limits. I must ask the hon. Member to recognise them and not challenge my ruling.

Mr. Madden: Several hundred people in Kashmir have been killed and hundreds more injured. They are suffering from virtually round-the-clock curfews which have gone on for months. There are shortages of food and water. People are sheltering in mosques for fear of death, injury and rape. There are shortages of medical supplies. Soldiers turn away people who wish to get medical treatment in hospitals. If that is not a matter that should be reported to the House, I do not know what should be. I do not——

Mr. Deputy Speaker: Order. I do not question the gravity of the matters to which the hon. Member refers, but I must question the propriety of raising them in this debate. It is my duty to confine the debate to the Bill before the House. The hon. Member must seek some other opportunity to raise the serious matters that he is bringing to the attention of the House.

Mr. Madden: This matter will not go away. Frankly, it is much more important than the parliamentary rules and procedures of the House. I shall seek every opportunity to report to the House what is happening in Kashmir, because historically the House and this country have great responsibility for the boundaries that were drawn and for the partition of India and Pakistan. We cannot abdicate. That is why a position of neutrality is wholly irresponsible and why it will be quickly swept away. The people whom we represent are worried about these matters, even if the House of Commons is not.

Mr. Patrick Ground: Like other hon. Members, I join in welcoming the return of Pakistan to democratic government. I share the admiration that has been expressed for the way in which Pakistan has welcomed so many refugees from Afghanistan. I admire the role that Pakistan families are playing in the life of this country.
The Bill reflects the return of Pakistan to normality within the Commonwealth, but one matter concerns me and many of my constituents—the treatment that is accorded to Ahmadi families in Pakistan. As our relationships with Pakistan become more normal and as the law enforcement provisions in the Bill become

effective, that matter will become even more worrying to many people, including my constituents, whose relations had their homes in Pakistan burned in April 1989. The Pakistan constitution guarantees equal treatment in law, protection of life and property and the liberty of each citizen. It recognises that Governments are under a duty to protect every citizen, especially those who are victimised because of their beliefs.
There are signs that the police knew in advance of the incidents that took place in April 1989. They gave an assurance that the police forces had been adequately reinforced. Nevertheless, about 25 houses were burnt down or grossly damaged, with no sign of any effort being made by the police to offer protection to the Ahmadi families. The same pattern was repeated in adjoining villages.
The story has been documented by the human rights commission of Pakistan, and no doubt the document describing the events in Nankana Sahib on 12 April 1989 will be available in the Library for hon. Members to see. My constituents whose families have been affected by the incidents tell me that there have been no prosecutions of the people concerned, that no compensation has been paid and that there is no sign of the Pakistani Government doing anything to alleviate the persecution of the Ahmadi Muslims in Pakistan.
I understand from correspondence with Foreign Office Ministers that they have made it clear that the British Government regard such persecutions as repugnant. The Minister of State told me that the Government have made their views clear to the Pakistan Government on a number of occasions.
At a time when we are welcoming Pakistan into the Commonwealth and acknowledging the good things that the country has done, it is important that we should place on record our concerns about such persecutions and make it clear that we shall continue to express our concern until that blemish in Pakistan's conduct is removed as we hope that it will be removed. A country that has shown such generosity of spirit in its behaviour towards the Afghan refugees and a religion with an old and well-established tradition of toleration and respect for other beliefs can surely improve its conduct towards a small sect——

Mr. Tom Cox: I am following with interest the hon. and learned Gentleman's argument, and I do not dispute what he says. A great many members of the Ahmadiyya community live in my constituency. But does not agree that, under the premiership of Benazir Bhutto, a much more progressive attitude is being adopted to those people and their religion than was ever adopted when the military controlled Pakistan?

Mr. Ground: I hope that the hon. Gentleman is right, but my constituents who discuss the matter with me say that they do not see any great sign of improvement. The incident to which I referred took place in 1989, after the accession of the present Prime Minister of Pakistan, and there were further ugly incidents in July 1989 during which a number of Ahmadis were killed in another part of Pakistan. I hope that the hon. Gentleman is right. Certainly Benazir Bhutto has inherited many problems and is grappling heroically with many of them. But this is one problem that must be grappled with and I hope that the House will join me in expressing the hope that the blemish to which I have referred will be removed from the


conduct of Pakistan and that the concerns felt by so many of our constituents belonging to the sect will be alleviated as time goes on.

Mr. Tom Cox: Like all hon. Members who have spoken in the debate, I warmly welcome the Bill. Those of us who have followed events in Pakistan for many years—certainly while, for too long, it was under the control of the military—will have despaired of that country's ever returning to democracy.
Those of us who applauded and supported Benazir Bhutto when she campaigned against the military have followed her role with great interest and admiration since she became Prime Minister. As the hon. and learned Member for Feltham and Heston (Mr. Ground) said, she inherited many problems and, sadly, she still has many problems. However, the stability that is returning to that great country of Pakistan is without doubt due in great part to Benazir Bhutto's heroic leadership.
Hon. Members have already referred to the problems facing Pakistan. In common with many hon. Members, I have a large Pakistani community in my constituency. Many of them are second or third-generation Pakistanis. Although their parents were born in Pakistan, their sons, their daughters and their grandchildren have been born in this country. The role that they have played for many years, and the role that they seek to play now, has been a great asset for this country. I have close contacts with the Pakistani community in my constituency and hon. Members will be aware, as I am aware, of the valuable role that they play in many aspects of day-to-day life. I know from recent events, including Pakistani socials and weddings, how much they have welcomed the re-entry of their country into the Commonwealth.
I believe that, if someone deserves credit, it does not matter how often that is referred to. Pakistan and this country have been fortunate to have a high commissioner of the quality and diplomatic skills displayed by the Pakistani high commissioner to the United Kingdom. He is an honourable, fine, outgoing diplomat. Those of us who have come into regular contact with him in our capacity as active members of the Anglo-Pakistani group in the House are aware of the role that he has played and will no doubt continue to play. Like other hon. Members, I pay the warmest tribute to him.
I note the comments that you made earlier, Mr. Deputy Speaker, about the width of debate that we are allowed. However, now that Pakistan is once again a member of the Commonwealth, our constituents expect certain things to happen. They look to the British Government to be more sympathetic to the kind of problems that Pakistan faces as a member of the British Commonwealth. Reference has already been made to the courageous attitude of the Pakistani Government to the people of Afghanistan. Pakistan is not wealthy, and it faces many problems of its own. However, it did not once question whether it was able to take in refugees from Afghanistan. It opened its doors and brought in many people, at great suffering and cost to Pakistan.
I ask the Minister to take note of those problems. I hope that he will convey to his right hon. Friend the Minister for Overseas Development the need for outgoing help, especially financial outgoing help, for Pakistan.
My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) referred to the difficulty of entry to this country facing people from Pakistan. Again we must remember that Pakistan is a member of the British Commonwealth. Irrespective of party, I am sure that many other hon. Members will find, as I have, that our constituents feel that, if their country belongs to the Commonwealth, and they follow the laws, they are entitled to expect what they regard as certain rights.
I believe that the next point is for the Minister to answer. As letters about people living in Pakistan, which I send to the Home Office, are invariably sent to the Foreign and Commonwealth Office, I assume that this matter is his responsibility.
As my hon. Friend the Member for Bradford, West (Mr. Madden) has said, often people cannot win under the existing system. If they are young and seek to come here for a holiday, they are told, "We are not allowing you entry because we do not believe that you will leave at the end of the required period of your visit." If, on the other hand, they are elderly people who want to come here to visit their sons and daughters, they are told, "You are so elderly that you would not want to go back to Pakistan." This causes bitterness in our constituencies.
Like all hon. Members, I have no objection to rules if they are fairly followed, but we often get the opposite impression. In fact, I heard about a case over the telephone today, which will land on the desk of the appropriate Minister at the Foreign and Commonwealth Office either tomorrow or the day after—I believe that it is the hon. Member for Hove (Mr. Sainsbury). My constituent outlined the case of his niece who wanted to come here for a three-month holiday, but has been refused on the grounds, "We are sure that, at the end of the three-month holiday, she will not return."
We all welcome Pakistan back into the Commonwealth. It has a great deal to offer the Commonwealth, but we in the United Kingdom—and especially the Government—must show our commitment to countries such as Pakistan. It is now time that the Minister seriously looked at the attitudes of entry certificate officers in the various high commission offices in Pakistan.

Mr. Peter L. Pike: Does my hon. Friend agree with me about another example of the bad policy operated by the Government on such matters? Does he agree that, where DNA testing proves that a wrong decision was taken in the past on an entry application, that decision should now be put right regardless of the age of the applicant?

Mr. Cox: My hon. Friend has made a valuable point, but I shall not pursue it, because I might encounter your displeasure, Mr. Deputy Speaker. However, I ask the Minister to discuss that point with his officials, not only here, but especially in Pakistan. If, when he replies, he can give us the assurance that he will look seriously at the points that many hon. Members have made—irrespective of party—it would show our constituents and the Government of Pakistan not only that we welcome Pakistan back into the Commonwealth, but that we shall


now start to put right any wrongs that we have committed as a country, possibly under successive Governments. If we do that, although this debate may have been restricted in a way that many of us have not liked, it will nevertheless have been of great benefit.

Mr. Hugo Summerson: I join hon. Members of all parties in welcoming Pakistan's return to the Commonwealth, and especially to democracy.
I listened carefully to the hon. Member for Tooting (Mr. Cox) and must take issue with him on one point. He spoke about "the stability" in Pakistan. I am afraid that the position in Pakistan is not stable and has not been stable for sometime, and that Pakistan does not show any particular signs of returning to stability in the near future, although that is something for which we must all hope.
I shall be brief and when I say that I shall conclude, I shall, indeed, conclude. Having heard your strictures, Mr. Deputy Speaker, I shall not say much about Kashmir, although I had intended to quote at length from an article in The Times of 8 May, which was headed:
Indian crackdown turns Kashmir into fortress.
I shall merely say that if you happened, Mr. Deputy Speaker, to fly from India to Pakistan, you would travel from one democracy to another. The chances are, however, that you would fly over a territory whose people do not enjoy a democracy and do not have the right to self-determination. Those people should have the right of self-determination, which they were first told that they should have at the United Nations in 1948. They still do not have it, and too much time has passed.
I conclude as I began, by saying that I welcome Pakistan's return to the Commonwealth and rejoice in its return to democracy.

Mrs. Alice Mahon: I join other hon. Members in welcoming Pakistan back into the Commonwealth of nations and its return to democracy. The whole House should support Benazir Bhutto as she faces the difficult task of holding together democracy in Pakistan.
I welcome the end of the suffering of many women in Pakistan. Under General Zia, women suffered especially with the passing of the Hadood ordinances. Those severe laws had a significant effect on women's rights. When we talk about democracy in Pakistan we should bear in mind the fact that the ordinances have not been fully revoked; but at least their implementation has been suspended under the new Government.
I support the pleas for more humane treatment of Pakistanis who visit the United Kingdom. I have in mind especially the women of Pakistani families living in this country who are seeking to bring their husbands or fiancés here to live with them and to share a life together. They face a great problem. Trick questions in interviews aften work against people who have a language difficulty and are extremely anxious. If they are unable satisfactorily to meet the terms of the interview they may be unable to share a life with their loved one in this country. Pain and suffering is caused when families are kept apart by what I consider to be inhumane immigration laws.
Can the House debate the Bill in peace and tranquillity while the people of Kashmir suffer indiscriminate killings, arbitrary arrests, unlawful searches, unprovoked assaults as a result of peaceful demonstrations and a complete

disruption of their normal lives? Many Kashmiris have suffered the imposition of an indefinite curfew for months. The are denied basic human rights. Surely it is time to debate the position in Kashmir. I know that you would rule me out of order, Mr. Deputy Speaker, if I attempted to introduce that issue in this debate. None the less, I feel that such a debate is long overdue. The Minister quoted the Simla agreement of 1972, but no Kashmiri representatives were consulted on or involved in that agreement between India and Pakistan.
Of course the Kashmir people want independence and the right of self-determination. Kashmir is not part of India or of Pakistan. The right of self-determination for 10 million people is something that the House should take extremely seriously.
I welcome the fragile democracy that exists in Pakistan. I also welcome the fact that Pakistan is back within the Commonwealth. I urge the Minister, and the Government as a whole, to take seriously what is happening in Kashmir, which is resulting in great suffering. I beg for an urgent debate on Kashmir on an occasion when you, Mr. Deputy Speaker, will not rule me out of order.

11 39 pm

Mr. George Foulkes: It is a great pleasure, even at this hour, to say a few words in reply to what has been an excellent debate. A measure of the importance of the subject, and of our concern about improving relations between our two countries, is the number of hon. Members on both sides of the House who have participated in the debate even at this—as my hon. Friend the Member for Bradford, West (Mr. Madden) described it—ungodly hour. It is notable that those who have participated have included the principal official Opposition spokesman and the foreign affairs spokesman for the Liberal Democrats. I am afraid that I do not have the knowledge and experience to go down the gastronomical and matrimonial byways of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), so I shall concentrate on the five themes that seem to have emerged from the debate.
First, there has been a universal welcome for the Bill and, above all, for the return of Pakistan to the Commonwealth after a gap of 17 years. The Opposition are still positive about the Commonwealth, and none of the cynicism that seems to be beginning to creep in among Conservative Members exists among the Opposition.
Secondly, during the debate we have heard widespread respect and affection, which I share, for Benazir Bhutto, the Prime Minister of Pakistan. I had the privilege of meeting her when she visited in July, as did many other hon. Members. As one or two hon. Members said, she does not have to seek out the problems in Pakistan, and we wish her well in overcoming them.
The third theme is the need for the United Kingdom Government to increase our aid and assistance to Pakistan, in recognition not only of its membership of the Commonwealth and return to democracy, but of its needs. That was said eloquently by my hon. Friend the Member for Tooting (Mr. Cox), the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) and also the hon. Member for Ilford, South (Mr. Thorne). It is truly an all-party request to the Minister. On behalf of the official Opposition, I hope that the Minister will pass on to


his right hon. Friend the Minister for Overseas Development that strong view, which has emerged from both sides of the House.
The fourth theme is the high regard in which all hon. Members, including myself, hold the high commissioner of Pakistan.
The fifth theme is concern about the position in Kashmir. Sometimes, when considering our problems in this not so United Kingdom, I recall the parable of the motes and beams. It is always easier to deal with other people's problems than one's own. The Opposition believe strongly that the problem of Kashmir should be resolved by discussion, not conflict. We hope that that difficult problem will not result once again in conflict between two countries, now two members of the Commonwealth. We hope that the Government will do all in their power to ensure that that does not happen.
The hon. Member for Ilford, South spoke eloquently. He is an active member of the Inter-Parliamentary Union, as is my hon. Friend the Member for Tooting. Pakistan will now rejoin the Commonwealth Parliamentary Association. I want to emphasise the importance of parliamentary contacts in re-establishing and further developing relations between our two countries.
My hon. Friends the Members for Bradford, West, for Tooting and for Halifax (Mrs. Mahon) all raised the issue of the difficulties experienced by people in Pakistan, particularly relatives of their constituents and relatives of others in the United Kingdom, in visiting this country. That was raised at Foreign Office Question Time, when several of my colleagues and I pressed the Minister strongly on that matter. The Minister's reply, although courteous, was not satisfactory. I urge him again to consider a sysematic review of the procedures and staffing at visa section not just in Pakistan, although that is important and relevant in this context, but in other parts of the Commonwealth.
The debate has been positive. As I said, a number of themes have come through strongly and we have all welcomed Pakistan back to the Commonwealth. The other place had a debate on this matter at midday, approaching Christmas, and perhaps our debate has not been as ebullient as that debate. However, it has certainly been serious and positive. I hope that the Minister will take from it some of the positive themes and translate them into policy. If he does that, he will certainly have the whole-hearted support of the Opposition.

Mr. Sainsbury: The debate has been excellent and a rare degree of unanimity has been displayed by hon. Members in all parts of the House in welcoming not only the Bill but the return of Pakistan to the Commonwealth and democracy.
I am happy to echo the words of praise for the Prime Minister of Pakistan, Benazir Bhutto, for her contribution to her country. I am also happy fully to endorse the tributes paid by many hon. Members to the Pakistan high commissioner for his excellent contribution to United Kingdom-Pakistan relations. That was mentioned by my hon. Friends the Members for Ilford, South (Mr. Throne) and for Keighley (Mr. Waller), the right hon. Member for

Tweeddale, Ettrick and Lauderdale (Sir D. Steel), the right hon. Member for Manchester, Gorton (Mr. Kaufman), the hon. Member for Tooting (Mr. Cox) and others.
Some hon. Members, including the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) spoke about aid. The aid programme to Pakistan has increased since the country's re-entry to the Commonwealth. It is planned to increase aid to £29 million this year and the bilateral aid programme has doubled in the past five years. It has increased from £18 million two years ago to £23 million last year and is our third largest programme in Asia.
We are increasing our contribution to the Commonwealth scholarship fellowship plan which we hope will enable the Commonwealth Scholarship Commission in the United Kingdom to provide a number of awards for Pakistan.
All 11 right hon. and hon. Members who spoke in the debate referred to Kashmir. I shall not incur your wrath, Mr. Deputy Speaker, by speaking at length on that matter, but I should like to emphasise that Britain's position of neutrality on the issue in no way implies indifference. Our long-standing position on Kashmir remains unchanged. We think that the dispute over the status of Kashmir can be settled only between the Governments of India and Pakistan, but we have made it clear that we would be prepared to play a role in settling the dispute if both sides wanted us to do that.
My hon. and learned Friend the Member for Feltham and Heston (Mr. Ground) spoke about the treatment of the Ahmadi community. We have long been concerned about that and have made our views clear. I assure my hon. and learned Friend that we shall continue to do that as and when appropriate.
Some hon. Members, including the hon. Member for Bradford, West (Mr. Madden), spoke about immigration. As I think most of them know, immigration policy is a matter for my right hon. and learned Friend the Home Secretary. It is a Home Department responsibility, and administration of that policy overseas is a matter for the Foreign and Commonwealth Office. However, I shall certainly look at the points made by hon. Members on immigration matters. I emphasise that about 90 per cent. of applications for visit visas are dealt with within 24 hours and we continually examine our procedures. We have been streamlining procedures in Islamabad to reduce queues.
Many hon. Members referred to the contribution made to the life of our country by citizens of Pakistani origin —corner shops were mentioned, as well as restaurants up and down the Wilmslow road. I thought for a moment that the right hon. Member for Gorton was rehearsing for a maiden speech when he waxed so eloquent about everything in Gortonia.
There is one issue of contention in the debate. I was rather concerned when Manchester and Lancashire tried to claim Imran Khan. I should remind the right hon. Member for Gorton that Imran Khan was a distinguished captain and player for Sussex, whose home ground I can see from my sitting room, if not from my bedroom, which faces the other way.
This has been an excellent debate and I thank all right hon. and hon. Members who contributed. The quality of the debate is a testimony to the value in which we hold Pakistan, the good wishes we have for her and the welcome we extend on her return to the Commonwealth and democracy.
I commend the Bill to the House.

Question put and agreed to.

Bill read a Second time and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — Town and Country Planning Bill [Lords]

The Solicitor-General (Sir Nicholas Lyell): I beg to move, That the Bill be now read a Second time.
There are four Bills relating to town and country planning matters before the House and, with permission, I shall speak to all four, as they should be considered as a unity.
The four Bills, taken together, amount to a consolidating measure. The Town and Country Planning Act 1971 was the last major consolidation of the Town and Country Planning Acts. The 1971 Act has been considerably amended by primary legislation, including the Town and Country Planning (Amendment) Act 1972, the Local Government Acts of 1972 and 1985, the Land Compensation Act 1973, and the Town and Country Planning Act 1984.
The result of the constant addition of material into the text of the 1971 Act and the repeal of extensive parts of it has been a loss of coherent structure. That is especially apparent in part IV of the 1971 Act dealing with special controls. The system of controls relating to listed buildings and conservation areas and to hazardous substances are so voluminous as to justify whole Bills relating to those topics alone. They have therefore been consolidated separately in the Planning (Listed Buildings and Conservation Areas) Bill and the Planning (Hazardous Substances) Bill.
In other respects, there is a broad correspondence between the Town and Country Planning Bill and the 1971 Act. The only difference is the creation of a new part which relates to Crown land and includes material from the Town and Country Planning Act 1984 and the Building Restrictions (War-time Contraventions) Act 1946. Finally, the Planning (Consequential Provisions) Bill, which is ancillary to the other three, deals with a number of technical and transitional matters, including repeals and consequential amendments.
In preparing the consolidation, the Law Commission issued a report in which it made a number of recommendations for amendments to and minor clarifications of the existing legislation, and those amendments appear in the Bills. All four Bills were referred in the usual way to the Joint Committee and on Consolidation Bills &c. during their passage in another place. The Committee reported that the recommendations of the Law Commission were necessary to produce a satisfactory consolidation of the law and that the four Bills, taken together, amounted to a single consolidation.
I should tell the House that a small number of further amendments will be brought forward.
As always, our thanks are due to the Law Commission and to the draftsmen for their excellent work in the process of keeping the statute book in modern and accessible form.
I commend the Bills to the House.

Mr. John Fraser: As usual, one welcomes consolidation legislation as it makes life easier for practitioners. This set of four Bills is a remarkable achievement.
Is the progress of consolidation now being speeded up by putting statutes and amendments to them on the equivalent of a word processor, albeit an extremely large one? Are statutes being computerised to any degree to


make that process easier and quicker in relation to the Bills before us and other heavy, voluminous, much-amended legislation that will come before us from time to time?

Mr. Frank Haynes: I did not know whether you were going to call me, Mr. Deputy Speaker

Mr. Deputy Speaker (Mr. Harold Walker): The Standing Order says that the hon. Gentleman must rise in his place. His place is not in the middle of the Chamber. Does the hon. Member wish to speak?

Mr. Haynes: Are you having a go at me, Mr. Deputy Speaker? I am sorry. I get carried away from time to time when you are in the Chair. I wanted to contribute. I am not pulling your leg. I want to have a go at the Solicitor-General, because he is talking about hazardous substances. From time to time, I have had a go at the Secretary of State for the Environment because we have problems in my area——

Mr. Deputy Speaker: Order. I am sorry to check the hon. Member, but I am bound to tell him that we are discussing a consolidation measure and we cannot discuss the merits of the contents of Bills which are the subject of consolidation. We can only discuss whether it is appropriate to consolidate at this time. The hon. Member cannot discuss hazardous substances now. He has to look for another opportunity.

Mr. Haynes: I accept your ruling, Mr. Deputy Speaker, and I fully understand, but the consolidation measure is hiding a problem back home in my constituency, and I want to express myself here tonight.

Mr. Deputy Speaker: I am sorry, but the hon. Member will not be allowed to express himself on that subject tonight. If he seeks an early opportunity, I am sure that Mr. Speaker will look favourably on an Adjournment debate application. I wish that the hon. Member would not keep smiling at me in that way. I doubt whether the

matter which he wishes to raise would be in order if he persisted in seeking to raise it. I hope that we will now allow me to put the question.

Mr. Haynes: I accept what you say, Mr. Deputy Speaker, but I hope that you will put in a good word for me upstairs.

Question put and agreed to.

Bill read a Second time and committed to a Committee of the whole House.

Committee tomorrow.

Orders of the Day — PLANNING (LISTED BUILDINGS AND CONSERVATION AREAS) BILL [LORDS]

Order for Second Reading read.

Bill read a Second time and committed to a Committee of the whole House.

Committee tomorrow.

Orders of the Day — PLANNING (CONSEQUENTIAL PROVISIONS) BILL [LORDS]

Order for Second Reading read.

Bill read a Second time and committed to a Committee of the whole House.

Committee tomorrow.

Orders of the Day — PLANNING (HAZARDOUS SUBSTANCES) BILL [LORDS]

Order for Second Reading read.

Bill read a Second time and committed to a Committee of the whole House.

Committee tomorrow.

Orders of the Day — EUROPEAN COMMUNITY DOCUMENTS

Motion made and Question put forthwith pursuant to Standing Order No. 102 (5) (Standing Committees on European Community documents)

Orders of the Day — COMMUNITY FINANCIAL PERSPECTIVE

That this House takes note of European Community Document No. 4963/90 plus COR I relating to revision and adjustment of the Community's financial perspective and the Supplementary Explanatory Memorandum submitted by Her Majesty's Treasury on 30th March 1990.—[Mr. Nicholas Baker.]

Question agreed to.

Orders of the Day — Community Charge

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Nicholas Baker.]

Mr. Graham Riddick: My purpose in calling for this debate is twofold. First, I wish to raise some of the concerns and problems which many of my constituents have about the community charge. Secondly, now that the Government are committed to carrying out a review of the operation of the community charge, I wish to explore some of the changes which could be and need to be made. Before I do so, I welcome the appointment of my hon. Friend the Member for Enfield, Southgate (Mr. Portillo) as Minister for Local Government and Inner Cities, and I welcome his comments on his appointment that he is there to listen to other hon. Members and to councils for the various suggestions that they may have on how to improve the workings of the charge.
I do not think that I would be being particularly controversial or disloyal if I were to say that the way in which the community charge has been introduced this year has left something to be desired. Introducing a new charge or tax will always throw up problems—as, for example, some of the anomalies which have arisen over second homes, but some of the more serious problems should have been foreseen.
The Department of the Environment's experience of how local authorities operate, and the experience in Scotland last year, when the community charge was introduced there for the first time, should have alerted us to the likelihood that councils, and Labour councils in particular, would jack up budgets and with them community charge bills in the hope of blaming high bills on the Government who introduced the new system. Indeed, a number of councils, including my local Labour-controlled Kirklees council, went for creative accounting last year by using more of their reserves than was prudent, which inevitably meant that there was less in reserve to keep down community charge bills this year.
If rates were still in existence, this year Kirklees council would have needed to raise them by 35 per cent. to bring in the same amount of money as it is raising through the community charge. The fact that it has set such a high community charge is somewhat immoral; it is certainly highly cynical. It did so because it could then blame the Government for introducing the system, rather than placing the blame where it truly lies—with the council because of its profligacy and inefficiency.
We should have written it into the legislation that no council could increase its budget by more than the rate of inflation in the first year of the changeover to the new system of local government finance. It appears likely that more central Government grant will be provided for local authorities next year. It would make sense for the Government, and it would be acceptable to the public, to legislate so that no council can increase either its budget or its community charge next year by more than the rate of inflation. Obviously, there would be scope for prudent councils to reduce spending, but my proposal would ensure that additional money provided to reduce community charge bills would be used for that purpose.
I feel that the Treasury was unwise to refuse to pick up the cost of the safety net in the first year. Many of the councils that have had to fund that safety net are

Conservative. The cost of that led to them having to levy a community charge higher than that warranted by the actual cost of local services. That diminished the accountability element. However, the greatest cause of concern has undoubtedly been the large increases in the amounts payable in community charges this year as against rates last year.
In my constituency where there are thousands of terraced houses with low rateable values, many patriotic Englishmen and women, especially pensioner couples and young married couples, have had their bills increased from between £200 and £250 last year to between £500 and £600 this year. That is a great deal of additional money for such people to find. Many pensioners do not qualify for rebate because they have been prudent during their lives and have savings which, while not providing a great deal of additional income, prohibit them from claiming rebates. That is especially so in Yorkshire, where folk tend to be rather canny and like to save for a rainy day.
I have to report to my hon. Friend the Minister that the transitional relief scheme, intended to soften the blow for such people, has not worked as intended. Whatever else the Government decide to do, they must provide proper, long-term help for them. I hope that my hon. Friend will examine closely the interplay between transitional relief and the safety net in Kirklees and ensure that decisions related to them help to keep down community charge hills.
I have always supported the principle of the community charge—that is, that everyone should contribute to local government services. It is interesting to note that a recent Gallup poll showed that the majority of the general public also accept that principle. However, there are concerns —and two in particular—about the community charge. The first is that the levels set by local authorities are too high. Secondly, there is a perception that the community charge is not fair because it is a flat rate tax. Of course, the irony is that that wholly ignores the fact that some 25 per cent. of charge payers are in receipt of rebates and that the majority of local government finance comes from central Government, who raise most of their finance through progressive taxes such as income tax.
If community charge levels had been set at between £100 and £200, the public would have accepted its flat rate nature—but because they are so much higher, there is a feeling that the system is unfair. To secure the public acceptance that will ensure that the charge works properly, the Government must either substantially reduce charge levels or make it relate to people's ability to pay—or provide a combination of the two.
I should be happy to see police and fire expenditure taken from local financing, and the community charge reduced accordingly. However, to do that as well as provide extra grant to reduce charge levels across the board would be extremely costly for the Treasury. That is why I believe that it would be sensible to make the charge relate more to people's ability to pay. If the Government do that, they will negate overnight the political flak to which they are being subjected.
Two years ago, I supported the banding of the community charge when I supported the so-called Mates amendment to the Local Government Finance Bill. I still believe that banding would be the most appropriate change to make. It is always easy to argue for a general, uncosted principle, so I shall present a concrete idea. I advocate a three-band system. It would comprise a standard band of community charge payable by


individuals having an income above £8,500 and up to the threshold at which the top rate of income tax is payable. I use the figure of £8,500 because it is already a threshold figure used in tax law and in relation to benefits in kind.
The second band would be the standard community charge plus 25 per cent., payable by those paying the top rate of income tax. The third would be the standard charge, less 25 per cent., payable by those having incomes below £8,500. The rebate scheme would still be there to help those at the very bottom of the income scale.
Crucially, local authorities would not need to know the intimate details of people's incomes. Everyone would be liable to the highest rate, with the onus on the individual, in making an application to the local authority, to obtain an Inland Revenue certificate based on his previous year's income to prove eligibility for a lower charge rate.

Mr. Hugo Summerson: How would a housewife, or some other person who stays at home, be treated under my hon. Friend's system? I refer to the individual who has neither income nor earnings of their own.

Mr. Riddick: My hon. Friend draws attention to one of the anomalies that is frequently raised at my own surgeries. The system that I propose would ensure that non-working mothers looking after their families at home, for example, would pay the lower band of community charge—which would be not only fair but widely welcomed.
The administration of the system I describe would not be too complex for local authorities or the Inland Revenue to undertake—contrary to the argument that might be made by some of my hon. Friends. If such a scheme were to be introduced, the current average community charge throughout England of £363, plus the average rate of inflation—which next year is likely to be in the region of 6 per cent.—could be used as the starting point for the top rate. In that way, no one would pay more in real terms next year than this year. The average top band level, indexed for inflation, would be £385, the middle band £307, and the lower band £231. In my own area of Kirklees, the figures would be £308, £246 and £185 respectively.
With the top band next year similar to this year's community charge, we would not produce the same yield as this year's community charge income of £13 billion. I am indebted to the House of Commons Library for its help with my figures. It estimates that there would be a shortfall of £3·2 billion, based on the figures I have quoted and taking into account the savings that would be made on rebates and transitional relief. The Library suggests that an average middle band of £350 per person could be achieved with an additional Government grant of only £2 million.
All sorts of figures have been bandied about in the press as to how much extra money the Secretary of State for the Environment is trying to get out of the Treasury. Quite a bit of flexibility is built into my system. I ask my hon. Friend to confirm that, contrary to what I have read in certain newspapers, the Government have not ruled out banding, and that the current review will consider my proposals.
A few other problems and anomalies must be sorted out. The Government are committed to introducing

legislation to clear up the anomalies relating to caravans. I welcome that commitment. A constituent came to my surgery as recently as last Friday and told me that, having moved house a short while ago, she now has to pay the standard community charge on her previous home, despite the fact that she is trying to sell it—so far without success. That kind of problem must be addressed.
Service men are faced with a real problem. Recently, I have been lucky enough to spend some time with the Army in connection with the armed forces parliamentary scheme, and the problem was put to me on many occasions. Service men have to pay the full community charge, wherever they are based in barracks. Many of them have bought houses to provide them with a home base while leading such a nomadic life. In most cases, they have to pay the standard community charge times two on their homes. A number of bitter complaints have been made to me about that. The Minister must look into the problem, together with his Ministry of Defence colleagues.
I hope that the House and the Minister will accept that I have made constructive suggestions, in marked contrast to the normal style of our debates on the community charge. Opposition Members are interested only in scoring cheap party political points. They never submit alternative proposals. The public would accept the community charge if we made appropriate changes. We could then turn the spotlight on Labour's draconian alternative. Anyone in my constituency who owns his or her own home would pay substantially more under Labour's proposals for a roof tax than they now pay through the community charge. Only last week, I received a parliamentary answer which showed that a man on average earnings in Kirklees would pay well over £1,000 if a local income tax were to be levied.
There is no easy alternative to the community charge. I hope that my hon. Friend, the Cabinet and my right hon. Friend the Prime Minister will bear in mind and implement some of my proposals so that the community charge no longer looms large on the political agenda. There are two far more important and fundamental battles that the Prime Minister has to fight: first, to ensure that the regeneration of Britain's enterprise economy and industrial base continues and, secondly, to fight off the Euro-fanatics on the Continent who, in their quest for political union, wish to take power from the British people and Parliament. Let us get the community charge right so that these vital tasks are not blurred.

Mr. Tim Janman: rose——

Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. Gentleman have the consent of both the hon. Member for Colne Valley (Mr. Riddick) and of the Minister?

Hon. Members: Yes.

Mr. Janman: I am grateful to my hon. Friend the Member for Colne Valley (Mr. Riddick) for giving me 30 seconds or so in which to make one or two comments on what he said.
The most important part of his speech related to the fairness of the community charge and to the ability to pay. As one who voted for the legislation on Second Reading but did not vote for the Mates amendment, I must say that my hon. Friend's basic philosophy—of dealing with this point through the creation of three bands, not based on


arbitrary income levels but on those who pay no tax, those who pay at the standard rate, and those who pay at the higher rate—is to be commended. My hon. Friend the Minister should look closely at the practicalities of moving in that direction.
I still believe, as I did on Second Reading, that the community charge is a much fairer system than were the rates, and with a slight touch on the tiller, I believe that we can show the British public that we are prepared to listen to their views on the charge, and to make it fairer. In that context, my hon. Friend's proposals are worthy of further scrutiny in detail. If the Government make the charge fairer, it will be to their great credit.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I am grateful to my hon. Friend the Member for Colne Valley (Mr. Riddick) for giving us this chance to discuss the community charge, and for the kind remarks that he made about my hon. Friend the Member for Enfield, Southgate (Mr. Portillo). I know that the latter has spent a great deal of time since taking up his post listening to views expressed by our right hon. and hon. Friends and by people outside the House —and taking their views seriously.
I sympathise with my hon. Friend's concern that household bills in Kirklees may in the long run be relatively higher than they were under the system of domestic rates. There is no good reason why they should in future be any higher than community charges elsewhere in the country, however. The aggregate external finance that we give to authorities each year should allow all authorities to levy the same community charge—before the safety net—for a standard level of service.
Historically, rateable values in Kirklees have been low, which, under the old rating system, would have meant that ratepayers in other authorities would have provided extra help through the grant equalisation scheme. The grant equalisation scheme was not universally popular, since it ignored the ability to pay of people in highly rated properties. More than 40 per cent. of homes which had above-average rateable values are occupied by households with below-average incomes.
The effect of the safety net, low rateable value grant and transitional relief is to ease the change in finance systems for authorities such as Kirklees. On the other hand, businesses in Kirklees stand to be significant gainers from the change in local government finance systems and the introduction of the uniform business rate. My hon. Friend did not mention this, but the general rate poundage for Kirklees in 1989–90 was 346·1p, compared with the average for all authorities of 258·3p. With the introduction of the uniform business rate, businesses in Kirklees will be able to look forward to a real reduction of some 25 per cent. in their rate bills.
My hon. Friend said that there would have been a 35 per cent. increase in domestic rates in Kirklees under the old system because of the council's spending policies as applied this year. I whole-heartedly endorse his condemnation of the spending policies of the council. He will know that Kirklees very narrowly missed being included on the charge-capped list of shame. Kirklees benefited considerably from support through the safety

net. However, its response was to spend about £117 a head over its standard spending assessment. It escaped capping only by falling within the de minimis provision.
My hon. Friend will recall the meeting which he, my hon. Friend the Member for Batley and Spen (Mrs. Peacock) and a delegation from Kirklees council held in February with my right hon. Friend the then Minister for Local Government and Inner Cities. The meeting discussed in detail the application of the standard spending assessments to Kirklees, and as we have said before, we are prepared to listen to the evidence and arguments for any changes to the methodology of our spending assessments.
There has been substantial comment on either alternative methods of local taxation or variations on the theme of the community charge: indeed, even the Opposition have made a half-hearted attempt. I am grateful to my hon. Friend for the contribution he has made to the debate, and I agree with him and the vast majority of people in this country that the fairest method of raising money to pay for local government is a charge on individuals. That has the double attraction of spreading the burden on paying for local services and increasing accountability—something which has been sadly lacking in the past, but which I am sure in the longer run will greatly influence the local democratic process.
My hon. Friend spoke of the need for the Government to re-examine their policies. Of course, we are looking closely at how the community charge is working in its first year in England and Wales. As my right hon. Friend the Secretary of State has made clear, we are reviewing a wide range of issues, and it is important that, by the time that we make the rate support grant settlement for next year—that is, in a few months' time—we shall have resolved all those matters and announced our conclusions. The basic principle remains the same, however: almost everyone should make some contribution to the cost of local services from which all people benefit.
A system of capital value rates—which the Opposition have courted—would bear many of the less virtuous traits of the old rating system. It would reduce accountability, place a tax on home improvement and relate only poorly to the ability to pay. By no means does it follow that an increase in the capital value of a property is matched by a correlating increase in the income of the individual.
A local income tax would do little better. It would be exorbitantly expensive to administer, and even if a local income taxation system were to be integrated with the existing national taxation system, between 12,000 and 13,000 extra staff would be needed in the Inland Revenue alone. The number of those contributing to the cost of local government would be substantially reduced, and thoe who did have to pay could find themselves paying more than the lion's share. For example, we have calculated—and my hon. Friend has confirmed—that in Kirklees a local income tax bill for a person on a taxable income of £12,000 could have amounted to over £1,000 in 1990–91.
My hon. Friend has spoken about the attractions of banding the community charge. Those who promote the idea of banding will, however, have to address a formidable series of objections. Any scheme that involved basing the level of charge on the income tax status of the individual would be difficult and lengthy to implement. The vast bulk of income tax is collected through PAYE. The Inland Revenue does not have complete or up-to-date records of all taxpayers, as for most people it does not need


them—and it hardly needs to be said that it has no records of people who do not pay income tax. My hon. Friend addressed those problems in his speech.
All the models for banding that we have seen so far have suggested a fairly restricted number of bands, generally based on those who do not pay income tax, those who pay at the lower rate and those who pay at the higher rate. That, indeed, is what my hon. Friend has proposed this evening. In the first place, those who pay no income tax will generally be entitled to community charge benefit, which can reduce a person's bill by up to 80 per cent. As my hon. Friend will know, one in four people will receive benefit: some £2·5 billion will be distributed, around £1 billion more than was the case through rate rebates and community charge benefit in Scotland last year. That will mean that, for the least well-off in the community—to whom it matters most—the community charge will be related to the ability to pay.
In the second place, a banding system would have a cruelly punitive effect on those who cross the bands. Those who move from below the income tax level, or from the middle band to the higher band, would at worst risk a net drop in their disposable income—or, at least, a discouragingly high marginal tax rate until they had moved well above the threshold.
Those on high incomes already pay significantly more through income tax. In fact, the top 10 per cent. of households pay about 15 times more than the bottom 10 per cent. towards the cost of local services. If we were to ask all those who are on the higher-rate tax band to pay an additional 50 per cent. of their community charge, that would only raise revenue sufficient to reduce the bills of those on the standard rate tax band by some £10 a year. My hon. Friend recognised the fact that, notwithstanding his banding proposals, there would still be a significant shortfall in income from the community charge, which would have to be made up by the national Exchequer or, in effect, the national taxpayer.

Mr. Riddick: I should like to push my hon. Friend gently and ask him to confirm that the Government have not ruled out the possibility of banding the community charge, and that that is one option being considered under the review. Will he confrm that he will be happy to talk to me? Perhaps I can take him through some of my proposals in more detail.

Mr. Chope: The Government are listening to the points that are made, and I should be happy to discuss my hon. Friend's points in more detail.

Mr. Brian Wilson: Will the hon. Gentleman give way?

Mr. Chope: If I may, I should like to continue, as this debate was introduced by my hon. Friend the Member for Colne Valley (Mr. Riddick) and the hon. Member for Cunninghame, North (Mr. Wilson) did not participate in it.
The measures which we have taken to ease the effects of the transition have been an important factor in respect of the uniform business rate and the community charge. The safety net provides assistance to people in those areas where rates have traditionally been very low. In Kirklees, people have benefited to the tune of £107 per head. Low rateable value grant provides an additional layer of protection, providing an extra £25 per head in Kirkless.
Transitional relief targets assistance on people in low-rated value properties, regardless of whether they are living in an area benefiting from the safety net. Because in Kirklees there is already substantial help through the safety net, the Government's assumed community charge for Kirklees is £220. This means that, where there were two or more charge payers in a household on 31 March, relief will have been awarded where the rates bill was less than about £280. More than 30,000 people in Kirklees will benefit from that relief.

Mr. Wilson: Will the hon. Gentleman give way?

Mr. Chope: I shall deal with a point made by my hon. Friend the Member for Colne Valley. He believes that extra protection over and above what has been given so far should be provided for people in low-rated properties. One option would be, of course, to base transitional relief on the actual charge that an authority sets. We have already made it clear, however, that the purpose of transitional relief is not to underwrite spending levels above those that we have assumed. The assumed charge for each authority, which was the basis of the transitional relief scheme, represents broadly what the charge would have been if authorities has sought to raise from their residents an amount consistent with their behaviour in 1989–90 and with the total standard spending figure of £32·8 billion.
The main problem in Kirklees is not that the SSAs have been incorrectly assessed; nor is it that the——

The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-seven minutes past Twelve o'clock.